, China

Next RRR cut projected to be delayed until March

Barring the possibility of increased financial market risk.

Despite the absence of an RRR cut as CCB International had expected, the PBoC has injected massive liquidity with maturities varying from three days to one year.

According to a research note from CCB International, during the week ended 22 Jan, the PBoC made a short-term (3 to 28 days) net injection of RMB465b through open market operations.

In addition, the PBoC made a midterm injection (3 to 12 months) of RMB862.5b via Mid-term Lending Facility. This is more than an RRR cut of 50bp that releases liquidity of RMB680b.

Here's more from CCB International:

While we believe this will smooth the liquidity crunch usually seen before the Chinese New Year (CNY), it is not a substitute for RRR cuts. Among the RMB862.5b injections, 52% of them will expire in Apr and another 25% in Jul.

Unless there is a sharp rise in financial market risks, we expect the next RRR cut to be delayed until post-CNY, likely in Mar.
 

Join Hong Kong Business community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!