Sheng Songcheng, a former Director of the People’s Bank of China’s (PBOC) statistics department, has proposed a mild rate drop in the second half of 2021 to mitigate the risks of an economic downturn and US rate hikes.
“China’s monetary policy should stay stable in the second half of the year, with a slight loosening in interest rates.”
“A sensible and moderate interest rate drop would assist the Federal Reserve reserve policy room for future interest rate hikes as its monetary policy tightens.”
“A moderate cut could also help to ease the flood of short-term speculative funds into China, which are pushing up the yuan.”
“It will also aid in the stabilization of China’s exports in the second half of the year.”
“China’s GDP could reach 8% in the second quarter before dropping to 5-6 percent in the second half.”
“An vigorous monetary reaction to support a broader economic rebound, given the weaker fiscal expansion than last year.”
“The right conditions are moderate inflationary pressure in the short term, as well as generally steady asset prices.”
Short-term yuan correction, no one-way devaluation – China Press
China’s Xi: China and Europe should work together more to address global concerns./n
