The ECB
has already been buying an average of €60bn a month since March, mostly in
government bonds, and intends to continue that programme until at least
September next year. Yet Mario Draghi has to talk of further probable stimulus
in what is a threat to other European central banks who are steeped
in miseries of low interest rates.
China has
been cutting rates and devalued its currency. Yet it is constrained to cut
rates further.
The PBOC
said that it was lowering the one-year benchmark bank lending rate by 25
basis points to 4.35 percent, effective from Oct. 24. The one-year benchmark
deposit rate was lowered by 25 basis points to 1.50 percent.he reserve
requirement ratio (RRR) was also cut by 50 basis points for all banks, taking
the ratio to 17.5 percent for the biggest lenders, while banks that lend to
agricultural firms and small companies received another 50-basis-point
reduction to their RRR.
Rational
investors take into account macroeconomic stability and growth.
Both of these seem under threat, given the outlook of ECB and Peoples Bank of China.
Is there an
aggravation of fear among central bankers? A certain helplessness? The vast done; the little seen?
This blog
recommends no investment.
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