A busy week ahead for Asia gets under way with financial markets digesting key economic data over the weekend: An interest rate cut by China’s central bank, a second consecutive month of contraction in China’s February official purchasing managers’ index (PMI) and the unveiling of India’s annual 2015/2016 budget.
The People’s Bank of China on Saturday cut its benchmark interest rate by 25 basis points to 5.35 percent, and reduced the benchmark saving rate by a similar margin to 2.5 percent. The cuts came into effect on Sunday, according to the statement.
“This combination of policy rate cuts and interest rate liberalization is in line with our expectations, but comes slightly earlier than we thought. The timing leads us to believe that policymakers have deemed the recent data weakness more than merely seasonal,” Societe Generale’s analysts wrote in a note.
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