PBoC chooses not to follow the US Fed’s hike - Nomura

Sandeep Kanihama FXStreet Contributor

The People’s Bank of China (PBoC) this morning chose not to raise its 7-day open market operation (OMO) reverse repo rate and other quasi policy rates, points out the research team at Nomura.

Key Quotes

“This belies market expectations (5bp hike) and the practice following the previous two US Fed hikes. We note that these rates, which are charged by the PBoC for lending in the interbank market (especially the most frequently used 7-day repo rate), have increasingly played the role of policy rates in China. Faced with a domestic slowdown that has been worse than expected and the potential fallout of a trade war, Beijing has already chosen to soften its stance on deleveraging and has introduced moderate policy easing measures.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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