-
China: central bank didn’t follow Fed hike
PBoC not following the Fed is more a signal to the market than a significant impact. Even it followed the Fed, the hike would only be 5 basis points. But the signal is loud and clear. The central bank is worried that market risks would escalate. Currently the financial deleveraging reform is adding pressure to squeeze out low quality credit. It is the policy's intention, however, the policymaker does not want a crunch-type crisis created by its own tightening policy. Targeted RRR cut for SMEs becoming more likely A targeted RRR cut for banks that lend out loans to SMEs becomes increasingly possible. As tightening ... (full story)