China’s Central Bank Signals Easing as Economic Risks Mount

China’s central bank signaled possible easing measures to aid the economy’s recovery after a sharp downturn in recent months fueled by a property slump, Bloomberg News reported. In its latest quarterly monetary policy report published Friday, the People’s Bank of China removed from its policy outlook a few key phrases cited in previous reports, including sticking with “normal monetary policy.” That suggests a shift in stance toward more supportive measures, several major banks like Citigroup Inc., Nomura Holdings Inc. and Goldman Sachs Group Inc. said. The report dropped previous phrases to “control the valve on money supply” and vowing not to “flood the economy with stimulus,” signaling more credit support in coming months. “We expect Beijing to soon significantly step up its monetary easing and fiscal stimulus to counteract the increasing downward pressure,” Nomura’s Lu Ting wrote in a Sunday note. China’s CSI 300 Index gained as much as 0.5% Monday morning on expectations of potential loosening, while the 10-year government bond futures contracts gained as much as 0.3%. Read more.
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