PBOC seen likely to reduce interest rates

The People’s Bank of China, the country’s central bank, may implement another interest rate cut in the near future to shore up the economy while its US counterpart is expected to tighten its policy significantly, experts said on Feb 7.

Hong Hao, managing director and head of research at BOCOM International, said the PBOC is likely to make use of a window of opportunity in February to reduce interest rates as the United States Federal Reserve may initiate interest rate hikes in March, which will make it harder for the PBOC to implement rate cuts.

The latest economic data indicated that the Chinese economy has yet to bottom out and pointed to the necessity of more easing measures, Hong added.