Yuan Pressured as Credit Softness Raises PBoC Easing Bets: Commerzbank

BitcoinWorld Yuan Pressured as Credit Softness Raises PBoC Easing Bets: Commerzbank The Chinese yuan faces renewed depreciation pressure as signs of softening credit demand increase the likelihood of monetary easing by the People’s Bank of China (PBoC), according to a note from Commerzbank’s foreign exchange strategists.

What’s Behind the Credit Softness? Recent data indicates that new bank lending and total social financing in China have come in below market expectations, reflecting weak borrowing appetite from households and businesses.

This trend is often seen as a precursor to further policy loosening, as authorities aim to stimulate economic activity.

Commerzbank analysts argue that if credit growth continues to lag, the PBoC may be compelled to cut reserve requirement ratios or policy rates, which would widen the yield differential between China and the US and thereby weigh on the yuan.