The People’s Bank of China cus its one year prime rate less than expected, and its five year more than expected:
- China rate cuts: LPR 1 year 3.65% (from 3.7%) & 5 year 4.30% (from 4.45%)
The headline to the post is a typical one I’m seeing from notes around the place. „Stumbling” is a mild word to describe the Chinese economy, its getting hit hard by the property sector imploding under debt loads, defaults, mortgage payment strikes and buyers pulling away in fear of further price falls (and hopes too for dip-buyers!). Consumer demand is drying up. Rolling COVID-related restrictions and lockdowns are not helping. Even the weather is not helping right now:
- Sichuan province in China have extended power cuts – factories remain closed
The mid-rate on the CNY was set not as weak as expected for the onshore yuan today:
- PBOC sets USD/ CNY reference rate for today at 6.8198 (vs. estimate at 6.8251)
I posted earlier I thought offshore yuan would continue to head higher:
China rate cut on the schedule Monday, 22 August 2022 – yuan levels (support, resistance)
No reason to doubt that IMO. We’ll see! Update:
