Monetary Easing in China Injects Element of Surprise to a Day Focused Already on Central Banking

July 5, 2012

The People’s Bank of China cut its one-year lending rate to 6.0% from 6.31% and its one-year deposit rate to 3.0% from 3.25%.  This is a follow-up easing to respective cuts of 25 basis points to each of those rates implemented on June 7, as well as three 50-basis point reductions of reserve requirements since November 2011.  Today’s moves, like those on June 7, surprised markets in their timing and are being interpreted as a portent of some bleak forthcoming Chinese data to be reported soon.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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