PBOC mulls near-term rate action

Central bank sees possible window of opportunity on expected Fed moves

The People's Bank of China, the country's central bank, may implement another interest rate cut in the near future to shore up the economy while its US counterpart is expected to tighten its policy significantly, experts said on Monday.

Hong Hao, managing director and head of research at BOCOM International, said the PBOC is likely to make use of a window of opportunity in February to reduce interest rates as the United States Federal Reserve may initiate interest rate hikes in March, which will make it harder for the PBOC to implement rate cuts.

"It is probable that the PBOC will further cut the interest rate of medium-term lending facility, a key policy rate, on Feb 18," Hong said.