Yesterday the PBOC announced fresh support measures for the economy: PBOC increases relending quota by 50bn yuan
More from Reuters:
- The central bank said it would lend 50 billion yuan ($8.1 billion) to banks at discounted rates to allow them to re-lend the money to farmers and small businesses – areas of the economy that are usually short of cash
- “We expect this kind of targeted easing to continue,” said Ting Lu, an economist at Bank of America-Merrill Lynch in Hong Kong. “We expect three cuts in the reserve requirement ratio (RRR) this year, totalling 150 basis points.”
- Lu said he believed RRR cuts are imminent because bets for a weaker yuan this year have led fewer firms to sell their dollars to the central bank for yuan, thereby reducing the supply of yuan and liquidity in the market
On China FDI:
- China drew a record $119.6 billion worth of FDI last year, slowing markedly from growth of 5.3 percent in 2013, the Ministry of Commerce said
And:
- The data showed that the government-led shift away from investment-heavy industries towards services and consumption is taking hold, with service-sector FDI increasing 7.8 per cent, while manufacturing FDI declined 12.3 per cent
- Services made up 55.4 per cent of overall FDI, with manufacturing taking up 33.4 per cent
- FDI in December leapt 10.3 per cent from the same month in 2013 to US$13.32 billion, Mofcom said
