UBS says an RRR cut this year still possible, but don't expect a rate cut

Expectations on People's Bank of China policy from UBS:

• UBS expects a cut to the RRR this year
• But not until later in the year, for the immediate future the People's Bank of China will use other liquidity tools instead to keep an accommodative credit and liquidity environment
• Don't expect an interest rate cut
• The bank is unlikely to opermit the USD/CNY to go higher than 6.8 by the end of the year
• Do expect depreciation pressures to rise as fed rate hike expectations increase
• Expect economic growth to pick up from a renewed pick up in infrastructure investment and public spending