Major central banks have adapted their monetary policies to the changing post-Covid landscape, while most have made controlling spiralling inflation their priority, others like China, have focused on boosting growth. The question is how much can the PBoC do to avert further economic woes? The implication for markets is indeed significant, for China… and the rest of the world.
To address falling economic growth, the People’s Bank of China, or PBoC, implemented stimulative measures and eased its key benchmark rate, cutting twice the one year loan prime rate, or LPR, reference rate in 2022 to 3.7%. It also reduced its mortgage reference rate in May to revitalise weak loan demand and stabilise the property market.
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