FXStreet (Delhi) – Prakash Sakpal, Economist at ING, suggests that they think deep PPI deflation squeezed business cash flows and it calls for lower interest rates for China and that’s why they forecast 50bp PBOC rate cuts in 2016. Key Quotes “December industrial enterprise financial data are due tomorrow at 9:30am local time. The focus typically is on profits, which were down by 0.6% YoY in November and by 1.5% YTD. The state-owned companies posted a 5.4% YoY fall in revenue and 6.7% fall in profits in 2015, according to the Ministry of Finance data released yesterday. The SOEs account for a third of total industrial enterprise profits. We think deep PPI deflation squeezed business cash flows and it calls for lower interest rates. We forecast 50bp of PBOC rate cuts in 2016, taking the 1-year lending rate to 3.85% by yearend (latest 4.35%, Bloomberg median 3.85%).” For more information, read our latest forex news.