China resists Fed easing, holds 1.40% rate as exports and stocks buoy outlook

China’s central bank, the People’s Bank of China, left its key seven-day reverse repo rate unchanged at 1.40% on Thursday, signalling no urgency to ease policy even after the U.S. Federal Reserve cut rates hours earlier. Analysts say resilient exports and a surging stock market near decade highs have given Beijing space to hold fire despite a slowing economy. Goldman Sachs economist Hui Shan noted that August data showed the downturn was less severe than expected, with authorities potentially deferring some stimulus to next year.Nomura’s Ting Lu cautioned that major easing could fuel a stock bubble, though a modest 10bp cut remains possible if markets correct. Other analysts expect policy support later this year to safeguard China’s growth target of “around 5%.” ANZ’s Xing Zhaopeng said further measures may come in Q4, but longer-term structural reforms under the upcoming October plenum remain a priority.
This article was written by Eamonn Sheridan at investinglive.com.

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