A sober report from Barclays with excellent detail.
Symmetric interest rate cut and mortgage rates cut
To protect banks’ NIM, PBoC governor Pan said lending and deposit rates will be cut symmetrically by 20-25bp. We estimate a cut of such magnitude would benefit corporates and free some capacity for new investment, while given the high savings of the Chinese households, the benefits from the 50bp mortgage rate cuts and loss from deposit rates cut are almost cancelled out.
