Australian dollar sinks like a stone after PBOC hold

Friday, 20 August 2021

The Australian dollar is in free fall again today as the PBoC refused to cut the prime market rate (its version of the cash rate):

I do expect the PBoC to break on this eventually. But today was always far too early. We’ll a number of RRR cuts first.

The more interesting question is will it achieve anything? It’s not the price of credit that’s holding Chinese growth back. It is the availability of credit via various regulatory clamps.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.