The economic slowdown is worsening in China under the pressure the real estate crisis and the “zero Covid” policy, which prompted the Central Bank to act in an attempt to support future activity. In a move to support credit and activity, the People’s Bank of China (PBoC) lowered two of its key policy rates. Unexpected, this gesture remains limited, however, with a reduction of ten basis points, to 2.75%, for the rate of its medium-term loan facility, and to 2% for that of its seven-day reverse repos. .
“With credit growth less responsive than in the past to easing measures, this will probably not be enough to prevent a further deterioration in the economic situation,” said Julian Evans-Pritchard, at Capital Economics. “Political support from Beijing could be too weak, too late and too ineffective”, judge the economists of Nomura, for whom “the markets are too optimistic about growth in the second half. »