China cuts two more key lending rates as economy sputters

[CIA Mole]

China cuts two more key lending rates as economy sputters

The People's Bank of China cut two lending rates on Tuesday for the first time in 10 months, as the world's second largest economy shows signs of stalling.

www.cnbc.com

 

[Song Hong]

It is not China but US in trouble if one is proficient in Maths and Economics. In theory the whole world needs to be in lock step with US rate hike or their currency will be raided and crush.

Now, something not normal is happening. China can somehow maintain her own currency strength despite having much lower rates than US. That means -- China is gaining world reserve currency status.

US in deep sht.

*************************

1. People’s Bank of China lowered the interest rate on its one-year medium-term lending facility (MLF) loans to financial institutions from 2.75 to 2.65 per cent on Thursday
2. Overnight, the US Federal Reserve voted to hold its benchmark lending rate at between 5 and 5.25 per cent, ending a run of 10 straight increases since March 2022

China cuts third key policy rate to prop up economy, while US Fed pauses hikes

People’s Bank of China lowered the interest rate on its one-year medium-term lending facility (MLF) loans on Thursday after the US Federal Reserve voted overnight to hold its benchmark lending rate after 10 straight increases.

www.scmp.com

 

[MH.Yang]

China does not have inflation, so it does not need to raise interest rates like India does. Is it difficult to understand? Do you think a bank interest rate hike is a good thing?

 

[Song Hong]

China interest rate much lower than US. This shows -- there is a strong demand of CNY despite of higher US rate.

This is a sign that CNY is not in hot demand overseas. CNY is gaining reserve currency status.

It is also a sign that China economy will go strong in long term -- due to CNY internationalization.

 

[S10]

China seriously need to get its real estate sector in order and move away from land sales as a mean of local revenue. All the purchasing power is tied down by massive mortgages.

 

[MH.Yang]

China seriously need to get its real estate sector in order and move away from land sales as a mean of local revenue. All the purchasing power is tied down by massive mortgages.

Not because of real estate, but because of bank deposits.

Now real estate prices have stabilized, and the dependence of local govt finances on land has significantly decreased.

In 2022, due to the risk aversion attitude during the epidemic, Chinese residents' savings increased by 26.26 trillion yuan (3.7 trillion US dollars) and total savings increased by 79%.

Everyone has deposited all their money in the bank, it's the problem.

Chinese bank deposits exceed loans by $6.5tn as caution prevails

Gap is largest since 1997, with spending sinking under cloudy economic forecasts

asia.nikkei.com

In addition to bank interest rate cuts, our most important task is to restore the blow to people's consumption enthusiasm during the epidemic.

 

[epebble]

It is not China but US in trouble if one is proficient in Maths and Economics. In theory the whole world needs to be in lock step with US rate hike or their currency will be raided and crush.

Now, something not normal is happening. China can somehow maintain her own currency strength despite having much lower rates than US. That means -- China is gaining world reserve currency status.

US in deep sht.

*************************

1. People’s Bank of China lowered the interest rate on its one-year medium-term lending facility (MLF) loans to financial institutions from 2.75 to 2.65 per cent on Thursday
2. Overnight, the US Federal Reserve voted to hold its benchmark lending rate at between 5 and 5.25 per cent, ending a run of 10 straight increases since March 2022

China cuts third key policy rate to prop up economy, while US Fed pauses hikes

People’s Bank of China lowered the interest rate on its one-year medium-term lending facility (MLF) loans on Thursday after the US Federal Reserve voted overnight to hold its benchmark lending rate after 10 straight increases.

www.scmp.com

Your logic makes some sense only among Freely Convertible Currencies. CNY is not a Freely Convertible Currency. Hence, normal laws of demand and supply don't apply. With the click of a button, I can buy or sell a million Euros or British Pounds. Not so with CNY.

 

[Song Hong]

Your logic makes some sense only among Freely Convertible Currencies. CNY is not a Freely Convertible Currency. Hence, normal laws of demand and supply don't apply. With the click of a button, I can buy or sell a million Euros or British Pounds. Not so with CNY.

What you mention is just a part of complex dimension. As part of internationalization of CNY, foreigners are allowed some access to buy China bond.

PBOC rate is always higher than US until very recently.

There is some foreigners selling at such a high US China rate differential but foreigners ownership have no collapse.

Your logic makes some sense only among Freely Convertible Currencies. CNY is not a Freely Convertible Currency. Hence, normal laws of demand and supply don't apply. With the click of a button, I can buy or sell a million Euros or British Pounds. Not so with CNY.

 

[dbc]

PBOC rate is always higher than US until very recently.

There is some foreigners selling at such a high US China rate differential but foreigners ownership have no collapse.

Your graphic shows bond yield for Chinese bonds is higher, bond yield is higher when demand is low. Issuers offer higher yields to stimulate demand. Higher demand means, higher prices which translates to lower yield.

So your graphic contradicts your assertion.

So, in the time-honored tradition of supply and demand, its price will go up. And because you're paying more for it, its yield becomes less. The increased demand for the bond results in rising prices—and falling yields. How Are Bond Yields Affected by Monetary Policy? Learn about how bond yields are affected by monetary policy. Find out how this determines the risk-free rate of return and its large role in bond pricing. www.investopedia.com

 

[CIA Mole]

Your graphic shows bond yield for Chinese bonds is higher, bond yield is higher when demand is low. Issuers offer higher yields to stimulate demand. Higher demand means, higher prices which translates to lower yield.

So your graphic contradicts your assertion.

So, in the time-honored tradition of supply and demand, its price will go up. And because you're paying more for it, its yield becomes less. The increased demand for the bond results in rising prices—and falling yields. How Are Bond Yields Affected by Monetary Policy? Learn about how bond yields are affected by monetary policy. Find out how this determines the risk-free rate of return and its large role in bond pricing. www.investopedia.com

no don't you understand?

economics, math, physics, biology, medicine, everything works differently over there in xi china