China May Continue To Increase Monetary Easing

The Australian central bank announced on the 3 day that the benchmark interest rate would be lowered by 25 basis points to 2.25%.

On the 4 day, the people's Bank of China announced that it will reduce the deposit reserve ratio by 50 basis points since February 5th.

Overseas institutional analysts pointed out that in the context of the Fed's rate hike is still a big probability event, and the central bank relaxed monetary policy in a number of economies, there may be more economic easing in recent years to stimulate the economy and curb possible deflation.

China is likely to continue to increase monetary easing.

This year, many economies have increased the central bank's easing policy.

The European Central Bank has launched an unprecedented policy of quantitative easing (QE), and central banks such as Switzerland, Denmark, Canada, Turkey and India have been cutting interest rates.

Market analysts generally expect the US Federal Reserve to raise interest rates in the year to boost capital flows back to us dollar assets and expect more economies to relax.

CBA analysts expect that

The rate of interest cut in May will be further removed by its latest statement.

Gillan David, chief economist of Barclays in Sydney, also pointed out that the Australian central bank has recently suggested that it will remain relaxed.

In May, it was the time to cut interest rates again.

UBS group economist in Tokyo Daiju

Aoki believes that the Bank of Japan is likely to further relax its policy as early as July this year, rather than the previous estimate of October.

When factors such as falling oil prices make the BoJ find it impossible to achieve the 2% inflation target, it will no doubt relax monetary policy once again.

Nomura Securities analyst pointed out that the downward trend of inflation has eased the pressure on the Central Bank of India to further relax its monetary policy. It is expected that interest rates will be stable again in a relatively long period of time, which is expected to be cut by 25 basis points to 7.5% in April this year.

China's central bank may continue to sell

Market analysts pointed out that under the global easing tide, the Central Bank of China did not rule out the possibility of further easing monetary policy following the announcement of its 4 day reduction.

Citibank said that China's PMI was lower than 50, which opened the window for lowering the accuracy. The last round of 2011 was triggered by PMI below 50.

Citigroup also expects the Central Bank of China to cut interest rates by 25 basis points this month, mainly due to the slowdown in real capital costs due to the slowdown in inflation.

The latest figures show that China's consumer price index is growing at a five year low level, and deflation pressure has increased the company's financing costs.

Mizuho Securities analyst also said in the latest research report that China's economy is facing the headwinds from European demand and anti inflation. Therefore, the pressure on the Central Bank of China to take more stimulus measures is increasing. The measures that may be implemented in the future include interest rate cuts besides this reduction.

Nomura Securities pointed out in the latest macro research report that the probability of further easing monetary policy in the Central Bank of China is still higher.

Nomura pointed out that the European Central Bank recently decided to adopt quantitative easing plan, which further increased the appreciation pressure of nominal effective exchange rate of RMB, or would inhibit China's commodity exports and increase anti inflationary pressure, so China's possibility of easing monetary policy still existed.