PBOC May Still Cut RRR, though Not Rates: Times

The PBOC is still likely to reduce lenders' reserve requirement ratios to add liquidity, though it may not cut interest rates this year, as the economy is at a reasonable growth range, the Securities Times reported citing analysts. The real interest rate excluding inflation is historically low, and the two-year average GDP in Q3 and Q4 is expected to be around 5.5%, which is close to the potential economic growth rate, the newspaper said citing Wu Chaoming, chief economist at Chasing Securities. PPI, which soared to a 13-year-high of 9.5% in August, is likely to decline by year-end as the basis of comparison rise, and monetary policy should focus on stability without overreacting to prices, the newspaper said citing Wang Jingwen, senior researcher at Minsheng Bank.