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MNI: PBOC To Make Q1 Cut After Stance Shift-Former Officials

MNI looks at the PBOC's first shift in monetary policy stance in 14 years.

MNI (BEIJING) - The People's Bank of China is likely to cut its benchmark 7-day reverse repo rate by as early as next quarter, and by about 40bp over the whole of 2025, as well as to allow the yuan to gradually depreciate to compensate for any hit from rising U.S. tariffs, former officials told MNI following Monday’s significant shift in monetary policy stance.

The PBOC has room to ease both its policy rate and banks’ reserve requirements after the Monday’s politburo meeting announced a change in the setting of monetary policy to “moderate easing,” after 14 years of a “prudent stance,” the former officials said. (See: MNI INTERVIEW: PBOC To Ease Further In 2025)

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MNI (BEIJING) - The People's Bank of China is likely to cut its benchmark 7-day reverse repo rate by as early as next quarter, and by about 40bp over the whole of 2025, as well as to allow the yuan to gradually depreciate to compensate for any hit from rising U.S. tariffs, former officials told MNI following Monday’s significant shift in monetary policy stance.

The PBOC has room to ease both its policy rate and banks’ reserve requirements after the Monday’s politburo meeting announced a change in the setting of monetary policy to “moderate easing,” after 14 years of a “prudent stance,” the former officials said. (See: MNI INTERVIEW: PBOC To Ease Further In 2025)

Keep reading...Show less