Chinese stocks hit a two-year high on Thursday as investors anticipated a fresh stimulus push from the People’s Bank of China, and in a front-page commentary earlier this week the official China Securities Journal noted that the surprise decision to reduce US interest rates by half a percentage point had “opened a window” for the PBoC to adjust rates as well, reported the Financial Times.
But there has been no hint of any big-bang surprise from the PBoC, which subsequently said it would not issue any “short-term stimulus” measures to boost the property sector, one the country’s most important economic engines.
“Liquidity seems to be broadly ample and the financial plumbing continues to function. You don’t want to go beyond that,” said one adviser to China’s central bank.
That is in sharp contrast to other affected countries — both South Korea and Italy have launched fiscal stimulus packages to help deal with the economic consequences of the virus.