China’s Monetary Easing Is Starting to Hit Home

There’s increasing evidence the People’s Bank of China’s year-and-a-half-long easing cycle is hitting the mark.

Exhibit one is Bloomberg’s Monetary Conditions index, which looks at changes in interest and exchange rates to give a sense of the overall tightness of policy. It shows the loosest conditions since late 2011.

Exhibit two: the PBOC’s new market-focused policy setting has kept the seven-day repo rate — a gauge of money market liquidity — confined to a narrow range since August. That suggests banks have access to funds if they want to lend.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam