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PBOC RRR Cuts More Likely - Expert

CHINA PRESS

China’s central bank will likely lower the reserve requirement ratio rather than interest rates this year, given strong U.S. dollar expectations and the need to support fiscal policy, according to Sheng Songcheng, senior advisor at the Lujiazui International Finance Research Institute. Sheng said authorities’ fiscal expenditure this year will be significantly higher than last year, meaning RRR cuts are needed to support banks purchasing of national and local bonds. The central bank will need considerable time before conditions are suitable for trading government bonds in the secondary market, Sheng added. (Source: Yicai)

MNI Beijing Bureau | lewis.porylo@marketnews.com

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