25 Jun 2013
Flash: 30% chance China's GDP below 7% in H2 - Nomura
FXstreet.com (Barcelona) - On June 17, The People's Bank of China (PBoC) issued a guidance note to commercial banks, made public through its website on June 24, in which asked banks to strengthen their liquidity management processes.
Zhiwei Zhang, Economist at Nomura, believes "this is another sign that the PBoC is not willing to loosen policies or inject liquidity to bring down interest rates." As Zhang expands, "The guidance note stated that 'overall bank liquidity conditions are at a reasonable level' and asked banks to 'prudently manage liquidity risks that have resulted from rapid credit expansion', 'appropriately contain the pace of loans and bill financing' and 'utilize the stock of money and credit to support the economy'."
The statements above, according to Zhang, "suggest that the central bank's policy stance remains tight", and that the decision to put this note on its website "suggests the PBoC wants to reiterate its policy stance" Zhang said.
The Nomura Economist, amid the hard-line stance adopted by the PBoC to manage speculative risks, maintains the view of a 30% probability that China's GDP growth drops below 7% in H2.
Zhiwei Zhang, Economist at Nomura, believes "this is another sign that the PBoC is not willing to loosen policies or inject liquidity to bring down interest rates." As Zhang expands, "The guidance note stated that 'overall bank liquidity conditions are at a reasonable level' and asked banks to 'prudently manage liquidity risks that have resulted from rapid credit expansion', 'appropriately contain the pace of loans and bill financing' and 'utilize the stock of money and credit to support the economy'."
The statements above, according to Zhang, "suggest that the central bank's policy stance remains tight", and that the decision to put this note on its website "suggests the PBoC wants to reiterate its policy stance" Zhang said.
The Nomura Economist, amid the hard-line stance adopted by the PBoC to manage speculative risks, maintains the view of a 30% probability that China's GDP growth drops below 7% in H2.