The lack of clarity from China’s central bank is at odds with a recent drive to boost market communication. The PBOC has issued a relative flurry of statements this month, saying on Aug. 15 that investors mustn’t focus too much on short-term concerns. Days earlier, after data showed the weakest increase in credit in two years, PBOC research bureau chief economist Ma Jun said the slump hasn’t hurt growth.Other central banks failing to communicate clearly include the Federal Reserve, Bank of Japan and European Central Bank. Panic is guaranteed as the monetary singularity approaches because the odds of extreme outcomes are rising. So central banks opt for confusion.
“Investors are waiting for further signals from the central bank,” said Shen Bifan, an analyst at First Capital Securities Co.’s fixed-income department. “It seems the PBOC wants to warn investors not to get excessively leveraged, but on the other hand, it wants to keep the measure moderate to avoid panicking the market.”
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Source: SFC | Source date: 15-Apr-2024 20:01
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