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VIEW: Nomura On Today’s LPR Move

CHINA

Nomura suggest that “today’s moderate LPR cut sent a signal of Beijing's easing bias, but its real impact will be quite limited, in our view. We believe the space for a further LPR cut is quite small due to the already low benchmark deposit rate and the need to keep the banking sector stable. A much more effective way for the PBoC to lower market interest rates is to increase purchases of FX so it can add liquidity to banks and prevent yuan appreciation. We expect the worst is yet to come for the economy, and we expect Beijing to step up easing stimulus measures significantly in spring 2022.”

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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