China Economics: RRR Cuts Proven Ineffective
- Kerry Liu
- Oct 9, 2018
- 1 min read
On 7 October 2018, the People’s Bank of China (PBOC) announced a Renminbi Reserve Requirement Ratio (RRR) cut of 100 bps, starting on 15-October. We believe China’s further RRR cuts will be ineffective to the real economy, and could even hurt the real economy. However, the cuts will help boost asset prices (real estate, stocks and bonds). While a price cap policy on properties has been implemented across first-tier and many second-tier cities, property rent will rise accordingly
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