Polling and comments from Citi analysts via a Reuters report:
- The People’s Bank of China is expected to deliver more monetary easing in the second quarter of 2025, including a 15 basis point cut to the loan prime rate (LPR) and at least a 25 basis point cut to the reserve requirement ratio (RRR), according to a Reuters poll
Citi said there’s a growing likelihood that domestic stimulus will be brought forward, given rising external pressures.
- “We see greater chance that domestic stimulus would be brought forward. We reckon that fiscal policies should lead domestic demand expansion amid external shocks”
- They also expect policy rollout to accelerate, with additional fiscal funding of around 1.5 trillion yuan (US$205 billion) likely around mid-year.
In March, Beijing announced new fiscal measures, including a higher budget deficit target, and has signalled more support is coming. The Politburo is expected to meet later this month to set the near-term policy agenda.
The People’s Bank of China has repeatedly said it will adjust interest rates and RRR at an appropriate time. A 50 basis point RRR cut was delivered in September, and further easing is widely anticipated to support domestic demand.
This article was written by Eamonn Sheridan at www.forexlive.com.
