The PBOC decided to leave the LPR unchanged earlier today here. And while it was “expected”, there were suggestions and some line of thought that they would have cut rates today in order to bolster support for the economy. Now, don’t get me wrong. China’s problems aren’t going to disappear just by monetary assistance alone. The fiscal side of things is the one that needs to do more of the heavy-lifting at the moment. But considering the circumstances, you’d thought that the PBOC might offer at least some aid.
Shanghai Composite index weekly chart
Alas, that wasn’t the case today. And as a result, Chinese stocks are being routed further with the Shanghai Composite sinking by another 2.7% to end the day at its lowest since April 2020. The CSI 300 index also closed 1.6% lower and observed its worst daily close since January 2019.