(Bloomberg) Analysts are speculating that China’s central bank will cut rates on Friday after it hinted at the policy move to spur rural finance in a slowing economy.
The statement follows previous hints by the People’s Bank of China to cut rates for rural banks to boost lending to small businesses and agriculture.
China’s Finance Ministry also said it will increase fiscal spending and speed up bond sales by local governments to offer additional economic support in the second half of 2021.
The comments by China’s monetary authorities come amid economic weaknesses following regulatory crackdowns, fresh virus concerns, and supply bottlenecks.
Some analysts now speculate rate cuts as early as Friday, saying that the move could increase credit supply.
Lu Ting, an analyst at Nomura Holdings Inc., says that the risks of growth slowdown and the limited flexibility in some existing measures prompt the central bank to cut rates in the near term.
CSI 300 is up +0.53%, USDCNY is down -0.03%.
