China not likely to cut benchmark interest rates soon

The main focus of the People's Bank of China will be on liquidity management.

OCBC Treasury Research noted:

In its third quarter monetary policy report, China’s central bank highlighted that the fundamental of Chinese recovery is still not solid enough due to still weak domestic demand. There is rising challenge for macro policies to balance the triangle relationships among growth, economic structure and price as Chinese potential growth is likely to slow as a result of weak external demand and changing social demographics.

For the next stage, the main focus of PBoC will be on liquidity management through reverse repo, repo, central bank bill and reserve requirement ratio. There is no mention on interest rate as a potential policy tool. As such, the latest central bank monetary policy report confirmed our view that China will not cut its benchmark interest rates any time soon.