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<Research>Citi: PBOC Unlikely to Rush Rate Cuts Due to Lower-Than-Expected CN Jul New Loan Data
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China's new loan data for July came in sharply below even the already conservative market expectations, according to a Citi research report. While government bond issuance will continue to provide support, there may be a gap in the future. With continuously weak household borrowing, some deposits may shift toward financial markets. Meanwhile, anti-involution policies could further suppress already sluggish corporate credit demand. That being said, Citi believes the People's Bank of China (PBOC) will not rush to cut rates based on a single month’s data, as monthly figures can be volatile, and financial support over the past 12 months has remained robust. The broker maintained its forecast for a 10-bp rate cut and a 50-bp RRR cut in 2H25, as real growth pressures are expected to intensify further in the autumn. AAStocks Financial News |
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