China stimulus buoys Australian dollar

The People’s Bank of China’s decision to help stimulate the world’s second largest economy by cutting the amount of cash the country’s banks need to hold has helped the Australian dollar briefly match a one-month high.

“This clearly signals that China has entered into an aggressive monetary easing cycle, to counter the economic slowdown and the rising deflation risk. This surprising move suggests the authorities are frustrated by the stubbornly high real interest rates facing the Chinese enterprises, especially those SMEs,” ANZ Greater China chief economist, Mr Liu said.

The Sydney Morning Herald Business Day

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply