China cut only one Loan Prime Rate, and less than expected – here’s why

This snippet from UBS on yesterday’s disappointment from the People’s Bank of China:

  • China cut its one year loan prime rate, but less than markets had anticipated.
  • For those bewildered by the plethora of policy tweaks in China, it is best to look at the bigger picture. China is easing policy, but the focus may be on supporting rather than stimulating consumption—lowering costs for existing borrowers more than encouraging stronger credit growth.

Bolding above is mine. The new normal is lack of stimulus from China.

I posted yesterday on China’s deleveraging efforts overtaking the desire for growth,

Whis is a worry for the rest of the world … AUD for example:

ps. Here is the PBOC decision yesterday:

This article was written by Eamonn Sheridan at Source