PBOC Seen Unlikely to Cut Reserve Ratios This Year: Journal

The People's Bank of China is unlikely to cut banks' reserve requirement ratio or interest rates in the short-term given growing expectations for higher inflations both within the country and globally, but will continue to reduce the financing costs of the real economy through structural monetary policy tools, the Shanghai Securities Journal reported citing Yan Se, associate professor at Guanghua School of Management, Peking University. The PBOC will smoothen the liquidity gap by increasing reverse repos and MLF towards year-end, the newspaper said citing analysts. MLFs valued at CNY1 trillion and CNY950 billion are to mature in November and December, respectively, along with increased maturity of reverse repos and the largest monthly sales of local government special bonds totaling CNY900 billion throughout this month, the newspaper said.