China cenbank chief flags more interest rate cuts
Corrects to say 7-day repo rate has already been cut by 20 bps, MLF rate already cut by 30 bps
BEIJING, Oct 18 (Reuters) -China's central bank governor said on Friday the reserve requirement ratio for commercial lenders could be cut further by 25 to 50 basis points by the year-end depending on liquidity conditions, keeping the door open to more policy easing steps.
The benchmark seven-day reverse repurchase rate has beenlowered by 20 basis points and the medium-term lending facility rate has been reducedby 30 basis points, People's Bank of China (PBOC) Governor Pan Gongsheng told a financial forum in Beijing.
On Oct. 21, the Loan Prime Rate (LPR) will decrease by 20 to 25 basis points, the official Xinhua news agency quoted Pan as saying.
Pan had previously flagged more potential stimulus steps to support the faltering economy after announcing in late September measures to stabilise the housing sector and rekindle capital market confidence.
At the financial forum on Friday, Pan also warned against any illegal fund flows into the stock market.
The PBOC introduced two new tools in September to support markets.
These were a swap programme giving funds, insurers and brokers easier access to funding for stock buys, and relatively cheap PBOC loans to help banks finance listed companies' share purchases and buybacks.
Pan said the two measures were based entirely on market-oriented principles, and the swap facility was not a form of direct financial support from the central bank.
The bank's provisions regarding stock buybacks and purchases have specific directional aims, and the fundamental bottom line was that loan funds must not unlawfully enter the stock market, Pan added.
Reporting by Ryan Woo; Editing by Clarence Fernandez and Muralikumar Anantharaman
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
