PBOC Likely To Cut Rate and RRR In H1 2024

The People’s Bank of China will likely cut the interest rate and reserve requirement ratio in the first half of 2024 to boost domestic demand and resolve local debt risks, said Wang Qing, chief macro analyst at Golden Credit Rating. Wen Bin, chief economist at Minsheng Bank noted low prices and imported inflation pressure gave the PBOC room to cut alongside the expected narrow China-U.S. interest spread, should the Federal Reserve end rate hikes in mid-2024. The PBOC should guide banks to lower deposit interest rates moderately, reduce banks’ liability cost and drop the benchmark Loan Prime Rate by 5-10 bps in the near future, said Dong Ximiao, chief researcher at Merchants Union Consumer Finance Co. (Source: China Securities Journal)