ANZ assesses that the People’s Bank of China (PBoC) is “in no rush” to cut interest rates as the export-led growth recovery “remains intact”. Thus, the Australian bank predicts a 10 basis point cut in rates only in the third quarter – and only if the country’s purchasing manager index (PMI) remains below 50, which separates contraction from expansion of activities. The institution also projects that external demand will probably weaken in the second half of the year, “as global narratives of slowing growth and disinflation remain in play”.
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