CBOC likely to maintain key policy rate

Bank of China (CBOC) is expected to maintain its key policy rate as it renews medium-term loans, influenced by uncertainty about the Federal Reserve’s interest rate adjustments, according to a Reuters’ survey. Market analysts anticipate a focus on stabilising the yuan despite calls for more stimulus.

Most predict no change in the interest rate on medium-term loans, while some suggest a slight reduction.

The Federal Reserve is likely to cut rates if inflation falls, with a 65 per cent chance of a cut in June.

Such cuts could enable China to lower borrowing costs and support economic growth.

PBOC’s actions may depend on clarity regarding the US interest rate cut. Economists expect further monetary easing in China, including policy rate cuts and reductions in banks’ reserve requirement ratios.