The trigger for Tuesday’s stock slide was China announcing a much smaller interest rate reduction than anticipated. Reuterseconomists who found Beijing’s policy moves profoundly disappointing, although some held out hope for strong action after the next Politburo meeting in July:
Analysts at BofA global research said in a note that “such marginal easing” would likely help prevent growth from slowing sharply, but was “unlikely to offer a strong boost to reverse the growth slippage in the near future”.bigger rate cuts were withheld for political reasons, specifically the reluctance of the Chinese regime to promote real estate speculation:
While that was in line with the reduction in the PBOC’s policy rates last week, some economists had predicted a bigger reduction of 15 basis points in the five-year rate, a reference for mortgages, to support the ailing housing market.
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