Nov 26
China: Cut in interest rates
The Peoples Bank of China (PBoC) today surprisingly cut both its benchmark lending and benchmark deposit interest rates by 108 bp to 5.58% and 2.52% respectively. In addition the reserve requirement ratio (RRR) for smaller commercial banks was cut by 200 bp to 14% and the RRR for major banks was cut by 100 bp to 16%. The size of the interest rate cut was a surprise. Our expectation has been that the lending and deposit rate would be cut four times during the next six months, bringing us back
