Peoples Bank of China

Chinese Central Bank Reserve Requirement Cut on Leap Year Day

February 29, 2016

The People’s Bank of China lopped another 50 basis points off its deposit reserve requirement ratio to 17.0%.  Five reductions in 2015 had reduced such to 17.5% from 20.0%, but the fifth of these was done five months ago in late October.  This kind of stimulus risks exposing the yuan to greater selling pressure. The […] More

Three Shocks Slam Global Financial Markets

December 11, 2015

Stocks are plunging and the 10-year Treasury yield fell seven basis points today in response to three developments. Oil prices fell 1.2% to $36.33 per barrel.  Commodities were hit by a projection from the International Energy Agency that the global oil surplus will persist for another year. China’s central bank website announced plans for the […] More

Dollar and European Equities Firm after Yellen Clarification

September 25, 2015

Fed Chair Yellen in a speech at the University of Massachusetts repeated that an interest rate hike by yearend is likely and indicated that she personally favored starting gradual rate normalization by then.  Investors seem pleased with that clarification and reduction of policy uncertainty. Japanese core consumer prices fell 0.1% on year in August, returning […] More

Dollar and European Equities Firm after Yellen Clarification

September 25, 2015

Fed Chair Yellen in a speech at the University of Massachusetts repeated that an interest rate hike by yearend is likely and indicated that she personally favored starting gradual rate normalization by then.  Investors seem pleased with that clarification and reduction of policy uncertainty. Japanese core consumer prices fell 0.1% on year in August, returning […] More

Another Loosening of Chinese Monetary Policy

August 25, 2015

Officials at the People’s Bank of China cut the one-year lending and deposit rates by 25 basis points to 4.85% and 1.75%, respectively, and the targeted reserve requirement to 18.0% from 18.5% today.  The announcement was made after Chinese equities fell another 7.6% today to their lowest level since December and just two weeks following […] More

Chinese Central Bank to the Rescue — Really No Big Deal

August 25, 2015

The People’s Bank of China reduced its one-year lending and deposit rates by 25 basis points each to 4.60% and 1.75% while also slicing its reserve requirement ratio to 18.0% from 18.5%.  Stock markets rebounded on the news. Near 10:30 EDT, key U.S. stock market indices were up by 2.5-3%. In Europe, share prices gained […] More

Easier Chinese Monetary Policy

June 29, 2015

The People’s Bank of China announced several policy-easing steps over the weekend. The one-year lending rate was cut to 4.85% from 5.10%.  Prior reductions in in November, February and May had trimmed the rate by a total of 140 basis points from 6.00%, and there were also single cuts of 25 basis points and 31 […] More

Offsetting Market Forces

May 11, 2015

Interest rate cuts by the People’s Bank of China sent Chinese share  prices up 2.9%. Impasse in Greek debt talks sent Greek share prices down 2.9%.  German politicians seem more inclined to gamble on Greece exiting the euro, as Greek leaders hint that a scheduled EUR 780 billion payment to the IMF due tomorrow may […] More

Another Round of Chinese Central Bank Rate Reductions

May 10, 2015

The Monetary Policy Committee at the People’s Bank of China cut both its one-year lending and one-year deposit rates by 25 basis points to 5.10% and 2.25%, matching the prior round of cuts in February and bringing the cumulative declines since November to 90 basis points and 75 bps.  Previous cuts totaling 56 bps and […] More

People’s Bank of China Slashes Banks’ Reserve Requirement to 18.5% from 19.5%

April 20, 2015

Sunday’s announcement was double the size of this year’s initial reduction of the reserve requirement ratio in February.  February’s 50-bp cut — the more typical magnitude of changes — had been the first cut since and easing in May 2012 capped off a flurry of three cuts in the space of a half-year.  The backdrop […] More

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