The commodity price collapse was well underway in early March when the PBOC reported GDP annualized growth had fallen to 7%, the lowest read in six years . This was on the heels of two PBOC benchmark rate cuts in the last 5 months. At the previous Reserve Bank of Australia monetary policy meeting, 8 April, it was decided to leave the overnight deposit rate unchanged at 2.25%.
The last rate reduction occurred at the February meeting and there was little else the RBA could do. The Australian economy had become heavily dependent on Chinese demand for strategic commodities, particularly metals, in order to supply China’s rapid economic expansion. Now, the PBOC was applying policy tools in order to stop its rapid economic contraction.
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