The Chinese Market and Bad Loans

The Chinese Market and Bad Loans

The Chinese Market and Bad Loans

Chinese financial Regulator Talks about Bad Loans

Today the Chinese financial regulator said that the share of “bad loans” had stabilized at 1.75% of credit portfolios after growing for some years. Other, non-government sources suggest it is much higher, so this may be just a way of the officials to blur the issue seen as a big risk in China and encourage foreign investors to enter the Chinese market.

BMI Research (part of Fitch group) mentioned 20% of loans are “bad”, and generate losses of around 1,9 bn USD. It concludes that People’s Bank Of China will need to print money and recapitalize banks in order to win the battle with ’bad loans’. One of the local analytic houses claims that the official numbers may be right but deliberately sum up only a subset of loans, the ones not requiring any foreign operations. For now the markets are not focused on China as a global risk factor so may simply ignore the bad loans numbers from the regulator as confirmation of their current view on the country.

McDermott (Royal Bank Of New Zealand) Talks NZD

Mr. John McDermott, assistant governor in RBNZ said in an interview in Wellington that the RBNZ highlighted two alternative scenarios in its monetary policy statement and both of them were on downside risks to rates.  He added that the market should have picked up this signal. Usually the central banks provide two scenarios, one to the upside and the second focused on the downside risk. However, Mr. McDermott said that it would have been very artificial in the current environment. According to the assistant governor, the surge in exchange rate was a “funny reaction” to the rate cut.

While the RBNZ doesn’t target the exchange rate, the longer it stays elevated, the more it damps inflation and makes it harder for the central bank to meet its mandate, McDermott said. The central banker added that the RBNZ will look at the exchange rates in upcoming weeks and may signal lower rates path if needed to push the NZD lower.

 

What Type of Trading Account is Best for You?

What Type of Trading Account is Best for You?

Open an Account Here and Find Out! 

 

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on email
Email

Recent .

Dogecoin is going to the moon… literally!

Dogecoin is going to the moon… literally!  While the cryptocurrency markets have been put through the mill the past few weeks, Dogecoin managed to steal the spotlight …

Read More →
Stock of the Week: Apple in huge demand, beats estimates by billions.

Stock of the Week: Apple in huge demand, beats estimates by billions. Apple beat estimates for quarterly earnings by billions of dollars. We look at …

Read More →
Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
˄