StanChart Doesn't See Much Room for Yuan to Appreciate

The transcript discusses Bloomberg Economics' expectations for interest rate changes, focusing on the PBOC's monetary policy and its impact on the one-year and five-year LPR rates. It explores potential policy stimulus and economic relief measures in response to the virus, emphasizing tax cuts and corporate support. The analysis extends to bond yields, market reactions, and the implications of fiscal deficits. Additionally, the transcript examines currency fixing, market dynamics, and the influence of China-US tensions on the CNY.

What was the market expectation for the one-year LPR rate cut?

• 15 basis points

• 10 basis points

• 20 basis points

• 5 basis points

Why is the PBOC cautious about aggressive policy easing for the property market?

• To avoid a housing bubble

• To prevent inflation

• To maintain mortgage loan stability

• To increase foreign investment

What is considered more effective than immediate policy stimulus in reviving the economy?

• Increasing interest rates

• Reducing corporate taxes

• Expanding the fiscal deficit

• Implementing tax cuts and fee exemptions

What is a potential consequence of a fiscal deficit expansion in China?

• Decreased bond supply

• Reduced investor interest

• Increased bond supply

• Stable bond yields

What is the PBOC's approach to the yuan's exchange rate?

• Fixing it at a constant rate

• Pegging it to the US dollar

• Devaluing it regularly

• Allowing market determination

What is the impact of China-US tensions on the yuan's exchange rate policy?

• Strengthening the yuan

• Avoiding high-level responses

• Weakening the yuan

• Maintaining a neutral stance

How has the CNY performed against a basket of currencies since the start of the year?

• Depreciated by 3%

• Remained stable

• Appreciated by 1.5%

• Depreciated by 1.5%