China: GDP expected to grow at 7% as officials try to calm markets – ING

FXStreet (Delhi) – Tim Condon, Research Analyst at ING, expects China to grow at 7% as PBOC officials stepped in to calm the markets over the weekend, suggesting that the equity and currency fall may be over.

Key Quotes

“China was the focus of attention at the G20 finance ministers meeting, whose communique included a pledge to “refrain from competitive devaluations” for the first time since 2013. PBOC Governor Zhou told his counterparts that the “correction in the stock market is almost done.”

“A statement posted on the PBOC website said Mr. Zhou told the ministers that “the yuan-dollar exchange rate has stabilized, the stock market correction has been largely in place, the financial market is expected to be more stable.” The PBOC fixed USDCNY today 25 pips above the previous (September 2) close, the first time in ten sessions it has not fixed lower than the previous session’s close.”

“We expect the PBOC authorities to stabilize the fixings in a narrow range for an extended period in hopes of reducing depreciation expectations as priced into the offshore market. We remain of the view that the considerable monetary, fiscal and macro prudential policy stimulus already in place and expected will put full-year growth in the “about 7%” range.”

Tim Condon, Research Analyst at ING, expects China to grow at 7% as PBOC officials stepped in to calm the markets over the weekend, suggesting that the equity and currency fall may be over.

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