Back
20 Mar 2014
Chinese Premier Li sends an easing signal - Nomura
FXStreet (Bali) - Zhiwei Zhang, Economist at Nomura, notes a comments by China's Premier Li in a State Council meeting on 19 March.
Key Quotes
"Li said that government should roll out policies to "stabilise growth and boost domestic demand" quickly but did not specify exactly what policies he was referring to. We believe this reflects increasing concerns over growth among the leaders and reinforces our view of policy easing picking up in Q2."
"We continue to expect a RRR cut of 50bp in Q2 and another 50bp cut in Q3. We believe the likelihood of an interest rate cut is rising as well, although it is not in our baseline forecast yet. China‟s fiscal policy stance may also become more supportive in Q2, with increased spending on infrastructure investment."
Key Quotes
"Li said that government should roll out policies to "stabilise growth and boost domestic demand" quickly but did not specify exactly what policies he was referring to. We believe this reflects increasing concerns over growth among the leaders and reinforces our view of policy easing picking up in Q2."
"We continue to expect a RRR cut of 50bp in Q2 and another 50bp cut in Q3. We believe the likelihood of an interest rate cut is rising as well, although it is not in our baseline forecast yet. China‟s fiscal policy stance may also become more supportive in Q2, with increased spending on infrastructure investment."