China likely to fully liberalise deposit rates – Rabobank

FXStreet (Barcelona) - The Rabobank Team comments that the PBoC is set to fully liberalize deposit rates, with the central bank having asked commercial banks to keep the rates below the ceiling to lower funding costs.

Key Quotes

“The WSJ claims today that the PBOC, which has liberalized deposit rates, has also asked commercial banks to keep those rates below a newly set ceiling to ensure funding costs stay low.”

“As I’ve also argued for some time, China will likely fully liberalize interest rates, as promised; but only when they are so low it is painless (like in Europe or the US).”

“Against that backdrop, how long until CNY moves lower? Let’s wait until after October, when it may be in the SDR basket, and see.”