Analysts at ANZ explained that the PBOC repriced the cost of short-term funding by raising the 7-day reverse repo rate by 10bps to 2.35%.
“This action is significant as it suggests the PBoC will adopt a flexible interest rate regime in 2017.
Since the PBoC has held the reverse repo rate at 2.25% since October 2015, this change is ground-breaking and suggests that the central bank will change the onshore rates more frequently.
We stick to our call for a prudent monetary policy stance but the policy actions associated with this stance need to be reinterpreted.
The bottom line is to prevent a cash crunch amidst deleveraging and deflating financial bubbles in certain sectors.
Going forward, the PBoC will continue to focus on establishing a yield curve with interest rate risks tilted towards the upside.”
You may be interested
Insurance Giant Allianz Is Testing a Token to Move Money InternallyBrian Evans - Apr 19, 2018
Allianz is testing a blockchain token to move money between its global affiliates.
SEC Subpoenas Riot Blockchain Over Cryptocurrency PlansBrian Evans - Apr 19, 2018
Various worrisome trends involving blockchain technology exist as of right now. One of the more popular solutions for struggling firms is to announce blockchain or cryptocurrency plans.…
Social Snafu: Twitter Verifies a Scam Verge Cryptocurrency AccountBrian Evans - Apr 19, 2018
The official Verge account, meanwhile, has yet to get its blue badge. A fraudulent Twitter account is making the rounds in the cryptocurrency market, with anonymous cryptocurrency Verge…