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The US-based rating agency, Fitch Ratings, is out with its review of the latest People’s Bank of China’s interest rate decision.

Key Highlights:

Too soon to call China’s RRR cut ‘a clear sign of easing’.

RRR cuts should be viewed in the context of liquidity management steps.

This is to ensure interbank funding conditions are stable in shadow banking crackdown.

Expects regulatory tightening to have a more powerful impact on credit growth.

Baseline forecast is China’s GDP growth to slow in 2H 2018.

This is due to deceleration in credit growth and softening property market.