Renoi974 @Renoi974: "••• #CHINE: Surprise reduction in..."

Reunion Island

••• #CHINE: Surprise reduction in interest rates to support the economy 📈 ➡ The People's Bank of China (PBOC) reduced the repurchase rate to seven days for the first time in almost a year, followed by Chinese banks that lowered their main reference loan rates. This measure aims to support the economy by making borrowing less expensive. ➡ The rate reduction comes after a major meeting of the Communist Party that disappointed investors with the lack of short-term stimulus measures. ➡ Modest rate cuts highlight the urgency of supporting an economy that is growing at its slowest pace in more than a year. The reduction of the seven-day PBOC rate, from 1.8% to 1.7%, is expected to have a limited impact on loan demand. ➡ Analysts suggest that new monetary easing measures may be necessary, including further rate reductions and a reduction in the minimum reserve ratio. ❌ China's CSI 300 index has fallen ❌, the yuan has weakened and the Hang Seng China Enterprises index has increased slightly. The PBOC has also reduced other interest rates and allowed banks to request a reduction or exemption from guarantee requirements to receive one-year political loans. ➡ The reduction in rates is perceived as a sign of urgency to support the economy, but the fundamental impact should be limited. The transition from the PBOC to the use of the seven-day rate as a reference rate could reduce the importance of the one-year medium-term loan facility rate. ➡ The reduction in rates could put pressure on the yuan, and the PBOC may have to deploy measures to support the renminbi exchange rate. $CHINA50 $HKG50 $ASHR $AAXJ $USDCNH

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CHINA50

HKG50

ASHR

Xtrackers Harvest CSI 300 China A-Shares ETF

AAXJ

iShares MSCI All Country Asia ex Japan ETF

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