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Institutions Foresee CN to Announce in Late Nov that RRR to be Cut in Dec: Report
Recommend 47 Positive 92 Negative 36 |
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Given the People's Bank of China (PBOC)'s MLF due to mature this week and reverse repos in the mainland totaling over RMB1.5 trillion, plus the factors of required reserve payments this Friday and tax periods, the market is once again concerned about required reserve ratio (RRR) or interest rate cuts, according to a report by Cailian Press. The PBOC had previously indicated an RRR cut before the end of the year, and now the market generally expects the second half of the month to be the first time point for an RRR cut, said a bond researcher from a commercial bank in a North China city. However, the chief of fixed income at a large brokerage in Shanghai revealed that the PBOC is likely to maintain liquidity this week through reverse repos and MLF rollovers, so the timing for an RRR cut has not yet arrived. Instead, it is expected to occur in the second half of the month or when large-scale government bond issuance takes place in December in order to raise liquidity. Institutions such as Guotai Junan, CICC, and TF Securities believed that interest rate cuts will be constrained by exchange rates and net interest margins in the medium term, while RRR cuts will be more feasible in the near term, which is expected to be announced in late November and implemented in early December. AAStocks Financial News |
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