Magdalene Teo, Fixed Income Research Asia, Eric Mak, Equity Research Analyst Asia, Julius Baer │China has opted for interest rate reform (to be more market-oriented) instead of announcing a benchmark rate cut, so liquidity flow is more targeted to the segments that need it.
People’s Bank of China
Benjamin Cole | The econosphere is again rumbling about Chinese debt and China banks, evidently forgetting the long serious faces made many times about Chinese debt and China banks in the recent past. But China keeps growing. Japan is another story that defies Western orthodox macroeconomics.
UBS | On 29 February the People’s Bank of China (PBOC) announced a 50bps cut in the reserve requirement ratio (RRR). We think RRR cuts are having a diminishing impact on banks’ inc entives to lend, since the loan -to- deposit ratio (LDR) limit of 75% has been removed.
Zhang Yuzhe via Caixin | China’s membership in the European Bank for Reconstruction and Development (EBRD) will help link its firms and financial institutions to projects backed by the well-established development bank, a senior central bank official says.
Benjamin Cole via Historinhas | Westerners love to hazard guesses on China and that is what they are, guesses. Even a Mandarin speaker in Hong Kong (with whom I recently conversed), with family on the mainland and employed at a large private-equity fund, professes no special insights into opaque China. But China’s central bank, The People’s Bank of China, appears to have eschewed the advice of Western central bankers, and gunned the money presses this summer. Moreover, the PBoC tactic looks to be working.
Huo Kan and Wu Hongyuran via Caixin | China’s banks are successfully managing 1.92 trillion yuan worth of non-performing loans, but tomorrow could bring a flood of bad debt.
Z. Yuzhe, W. Liwei and W. Hongyuran via Caixin | Strengthening the People’s Bank of China’s regulatory clout is high on a list of suggestions for improving financial market oversight following last summer’s stock market crash.
China’s unexpected decision to devaluate its currency triggers uncertainty in the markets.
China’s move to weaken its currency by a record 1.9% comes in the wake of poor trade data
By Peter Wong via Caixin | It is unlikely that the RMB or yuan, China’s “people’s currency,” will replace the dollar outright as the world’s only investment and reserve currency any time in the foreseeable future. But there is every indication that the dollar will have to make room for a second global reserve currency within the next 15 years. A revolution allowing investors to diversify risk – and creating a system with more choice and better ability to resist shocks – should be welcomed.