Overview

• The People’s Bank of China kept the one-year loan prime rate at 3.00% and the five-year rate at 3.50% on July 21.
• China’s GDP expanded 5.2% year-on-year in the second quarter, topping the 5.1% forecast but down from 5.4% in Q1.
• Retail sales growth in June slowed to 4.8%, missing economists’ 5.4% projection and reflecting weakening consumer demand.
• The offshore yuan traded flat at around 7.179 per dollar following the central bank’s decision.
• Nomura analysts cautioned that a ‘demand cliff’ could cut growth to about 4.0% in the second half and predicted new stimulus measures.