20 Jan 2014
PBoC signals tightening bias again
FXstreet.com (Bali) - The People's Bank of China held its annual "Money and Credit Working Conference" on Jan 17, after which Nomura Strategists believe there are signs that its policy stance will remain tight in Q1.
Key Quotes
The press release stated that: "Loan growth has been rapid in January due to loose interbank liquidity conditions and commercial banks' intention to lend early. As the Lunar New Year approaches, demand for cash will rise significantly. Regulators in charge of money and credit should highlight risks, guide financial institutions ... to arrange the pace of lending appropriately, and avoid rapid expansion of assets."
"This statement is a clear signal to us that the PBoC wants to contain credit growth. We think it helps to explain the hike in the interbank repo rate on Friday. We continue to expect monetary policy to remain tight and economic growth to slow in H1 2014."
Key Quotes
The press release stated that: "Loan growth has been rapid in January due to loose interbank liquidity conditions and commercial banks' intention to lend early. As the Lunar New Year approaches, demand for cash will rise significantly. Regulators in charge of money and credit should highlight risks, guide financial institutions ... to arrange the pace of lending appropriately, and avoid rapid expansion of assets."
"This statement is a clear signal to us that the PBoC wants to contain credit growth. We think it helps to explain the hike in the interbank repo rate on Friday. We continue to expect monetary policy to remain tight and economic growth to slow in H1 2014."