𝛼SK or Searchbearish
China Stimulus Update – Centralization of Debt Still Means MORE Debt!
818 Views25 Oct 2023 17:38
SUMMARY
- The latest wave of China stimulus not only confirms the dire financial state of local governments but also indicates that they have reached the limits of their borrowing capacity.
- China President Xi’s visit to the PBoC raises the likelihood of new interest rate cuts and cuts in the Required Reserve Ratio for banks.
- This puts the PBoC in a precarious state. No easing means the property recession continues, while the opposite means it must sell more US dollar assets to prevent yuan depreciation.
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