Across the Asia Pacific region, New Zealand’s central bank said that Governor Alan Bollard will quit in September and the Philippinesreported that economic growth accelerated, with gross domestic product rising 3.7 percent in the fourth quarter, after a 3.6 percent gain in the third.
In Europe today, Spain will report preliminary economic data for the fourth quarter and an index of euro-area confidence may rise for the first time in 11 months, according to the median estimate in a Bloomberg News survey of economists.
In China, some analysts backed away from their reserve- ratio predictions when they saw the central bank inject 353 billion yuan ($55.7 billion) into the financial system in the week before the holiday, using the 14-day contracts. Barclays said the move had an effect similar to a cut in the bank requirements.
London-based Capital Economics Ltd. said that a suspension of central bank bill sales also played a role in easing liquidity.
“Policy loosening in China has got off to a slow start” with the central bank “confounding widespread expectations,” said Mark Williams, an economist at Capital Economics who formerly advised the U.K. Treasury on China.
By leaving reserve requirements unchanged, “policy makers conveyed the signal that they are in no hurry to loosen,” he said in a note dated Jan. 26. He forecasts five reserve-ratio cuts this year amid risks to the nation’s growth, plus interest- rate reductions if the euro area starts to break apart.
Ken Peng, a Beijing-based economist at BNP Paribas SA, says that the government needs to be “careful not to overshoot monetary loosening, as it did in the financial crisis.” Lingering effects of record lending in 2009 and 2010 include the risk that local government financing vehicles will default on debt.
India cut banks’ reserve requirements this month, Thailand and the Philippines reduced interest rates, and the U.S. Federal Reserve pledged to keep benchmark borrowing costs “exceptionally low” through late 2014.
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