Iris Pang, economist at ING, notes that the China’s Central bank (PBoC) governor, Yi Gang, commented that there will be fewer required reserve ratio (RRR) cuts in 2019 compared to 2018.

“We see two possibilities from his comments. One is that each RRR cut will be 0.5 percentage points, not 1 percentage point, in which case we can still have 3 more RRR cuts this year. Another is that there will be fewer RRR cuts in 2019, but each still within a range from 0.5 percentage points to 1 percentage points. We believe that as long as the trade negotiation does not turn into a deal that lasts for a long time, then China still needs three more 0.5 percentage point RRR cuts at the beginning of each quarter. This could spread out the easing, and will not put massive downward pressure on the interbank interest rate compared to a 1 percentage point RRR cut.”