China Adds More Stimulus As Trade Dispute Escalates
19 Juni 2018 - 10:42AM
RTTF2
China's central bank added more funds into the financial system
on Tuesday after the US President Donald Trump threatened to impose
a 10 percent tariff on an additional $200 billion of Chinese
imports.
The People's Bank of China added CNY 200 billion via medium-term
lending facility on concerns over liquidity as well as negative
impact from trade conflicts.
After the US threatening, China's Ministry of Commerce called
the action "blackmail." China cautioned that it will take
comprehensive and powerful measures to protect its interest.
The ministry said the US action deviates from the consensus
reached by both sides on multiple occasions and disappointed
international society.
If the tariffs did lead to a fall in US imports from China, this
would have knock-on effects for those countries in Asia which
export intermediate goods to China, which are then assembled before
being shipped off to their final destination, Gareth Leather, an
economist at Capital Economics, said.
Last week, the PBoC had maintained its key borrowing costs after
the U.S. Federal Reserve decided to hike its rate for the second
time this year.
The bank left the 7-day reverse repo unchanged at 2.55 percent
and the rate on 14-day tenor at 2.70 percent.
The benchmark one-year lending rate has been unchanged since
October 2015.
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