PBOC Adviser Ma: The chance of a rate cut on Feb 20 has increased significantly

Dhwani Mehta FXStreet

Ma Jun, an external adviser to the People's Bank of China’s (PBOC) monetary policy committee (MPC), said that the chance of a rate cut to the Loan Prime Rate (LPR) on Feb 20 has increased significantly.

Additional Comments:

A reverse repo rate cut is good to restore financial market confidence.

Reverse repo rate cut should alleviate the shock to the real economy from the virus outbreak, especially small and micro firms.

This comes after China’s central bank unexpectedly lowered the interest rates on reverse repurchase agreements (RR) by 10 basis points earlier on Monday, in further efforts to relieve the pressure on the economy from a rapidly spreading coronavirus outbreak.

The measures rolled out by the Chinese authorities seem to have limited the impact of the crash of the Chinese stock internationally.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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