ICYMI – PBoC says it will cut rates, but gave no indication of a timeline for when

I posted earlier on what the PBoC says they are going to do:

• People’s Bank of China will soon cut reserve requirement ratio by 50bp
• People’s Bank of China will soon cut 7-day reverse repo to 1.5% from 1.7%

In brief:

• will cut reserve requirement ratio for banks by 50bp
• will cut 7-day reverse repurchase rate from 1.7% to 1.5%
• will cut down payments for 2nd homes
• will cut outstanding mortgage rates for individual borrowers by an average of 0.5%

The caveat on all of this is that the Bank made no time line commitment.

Other measures:

• will allow funds and brokers to tap PBoC funding to buy stocks
• PBoC Governor said we might cut RRR rate further by year end
• MLF will be lowered by 0.3%
• LPR will be lowered by 0.2 to 0.25%

Again, no specific time line given for all this.

Neverthelss, Chinese stocks have jumped. Property stocks are up nearly 5%.

This article was written by Eamonn Sheridan at www.forexlive.com.