The People’s Bank of China’s fifth consecutive interest rate cut announcement on Tuesday could be followed by two more rate cuts of 25bp each before 1Q16, notes Morgan Stanley.
Chetan Ahya and team at Morgan Stanley in their August 25, 2015 research report on “China Economics,” note PBOC’s latest announcement is the second combined interest rate and RRR cut taken during this round of policy easing.
PBOC’s second combined cut of interest rates and RRR
Ahya et al. point out that the central bank announced Tuesday it would trim the benchmark one-year lending rate by 25bp to 4.60% and the one-year deposit rate by 25bp to 1.75%, effective August 26, 2015:
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