China Will Wait to End of Q4 To Consider More Stimulus

China’s central bank will wait until fourth-quarter economic data is out and monitor U.S. and Japanese monetary policy before considering any more rate cuts or easing, a central bank adviser said on Tuesday.

The People’s Bank of China surprised the markets by cutting rates last Friday for the first time in more than two years to help stabilize the world’s second-largest economy. Reuters then reported that China was prepared to ease policy again.

“Regarding the next step, whether to cut rates again or take similar action, we still need to look at the fourth quarter’s macroeconomic index,” said Chen Yulu, who sits on the central bank’s monetary policy committee. He was speaking on the sidelines of an economy and finance forum in Beijing.

 
“It is also important to make decisions taking into account Japanese and U.S. monetary policy,” Chen said.

He added that he didn’t believe that Friday’s benchmark lending rate cuts represented a change in monetary policy, echoing the central bank line.

Prior to Friday’s moves, Beijing and the central bank had persisted with modest stimulus measures.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza