According to China Business News, People's Bank of China (PBoC) senior adviser Sheng Songcheng believes that China still needs an RRR cut and expects one to be forthcoming from China's central bank.
Songcheng noted that the RBOC is likely to cut the reserve requirements ratio for "some banks" and offer Medium-term Lending Facilities (MLFs), and that he expects China's 2018 M2 growth to accelerate over last year's reading as the effects of deleveraging begins to decrease. Sheng also stated that he expects the gap between aggregate financing and M2 to narrow.
If RRR cuts and increased access to funding go through, it's likely to be a net positive for the AUD, as the reserve rate cut could boost China's growth numbers.
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