Natixis' Garcia Herrero on APAC Economies

The video discusses the ongoing impact of the delta variant on global economies, highlighting the risks of policy missteps, especially in emerging markets. It examines the People's Bank of China's (PBOC) approach to monetary policy, focusing on liquidity injections to support the real estate sector. The discussion also covers the transmission effects of monetary policy, emphasizing the need for stabilization in property sales and credit growth. The potential adjustments in monetary policy tools like MLF and LPR are considered, with a focus on macroprudential measures over rate cuts.

What is a significant concern for emerging economies in the context of the delta variant?

• Decreasing inflation rates

• Stable economic growth

• Excessive liquidity in the market

• High inflation and poor growth prospects

Why did the PBOC decide to cut the reserve requirement ratio?

• To decrease the debt-to-GDP ratio

• To provide liquidity to the real estate sector

• To increase inflation

• To stimulate consumer spending

What could be a potential consequence if the PBOC decides to cut rates?

• It will reduce the need for liquidity injections

• It indicates a better economic situation

• It suggests a worse economic situation than anticipated

• It will lead to increased market stability

What is necessary for stabilizing the economy according to the discussion?

• Increasing interest rates

• Stabilizing property sales and credit growth

• Increasing export tariffs

• Reducing government spending

What measures are suggested to stabilize property sales?

• Increasing down payment requirements

• Lifting restrictions like loan-to-value ratios

• Increasing loan interest rates

• Reducing property taxes