Economist Dong Ximiao Sees Possible RRR Cut and Rate Cut in the Third Quarter

According to a report cited by ChainCatcher from Jin10, Dong Ximiao, chief economist at China Merchants Union Consumer Finance, said China could roll out both a reserve requirement ratio cut and an interest rate cut in the third quarter. He said that if the momentum of the economic recovery weakens at the margin in the second half of the year, policymakers may lower the policy rate by 10 to 20 basis points at an appropriate time. On reserve requirement reductions, Dong said there is still room for a 25 to 50 basis point cut this year, with a possible implementation window during a peak in bond supply or a period of tight liquidity. The report added that the People’s Bank of China is expected to make greater use of structural monetary policy tools to adjust market liquidity.