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China's RRR cut could lead to bank risks - Fitch

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 2, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    In a latest report published by Fitch via Reuters, the ratings agency noted that the recent RR cut by the PBOC could fuel increased lending growth by the Chinese banks, which would result in more bank risks.

    Key Headlines from Fitch report:

    The 50bp cut to the reserve requirement ratio (RRR) for Chinese banks on Tuesday, together with record loan growth in January, could point to an increasing likelihood that the authorities are shifting policy to enable more credit-fueled growth

    Next week's National People's Congress meeting should provide further information on the direction of Chinese economic policy and structural reform

    Fitch maintains that a return to sustained rapid lending growth by Chinese banks would be credit
    negative, with leverage in the economy already high

    Expects China's credit growth will continue slowing in 2016 to 13%
    For more information, read our latest forex news.

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