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PBOC Can Maintain Easing Despite Losing Yield Advantage: Journal

CHINA PRESS
MNI (Singapore)

The People’s Bank of China may still stick to its own easing policy to support growth despite China's sovereign bonds losing yield advantage over the U.S., the China Securities Journal reported citing analysts. However, the central bank is seen as more likely to ease through RRR cuts or other structural adjustments, while the expectation for a rate cut has cooled, the newspaper said. The China-U.S. yield spread fell to about 30 bps from more than 100 bps in early March, the newspaper said. However, given China's lower inflation and high trade surplus, the narrowing spread may not cause significant depreciation of the yuan or capital outflow, the newspaper said.

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