Credit slowdown lingers in China

China's lending and deposit rates remain stable, while outstanding loans still show a downtrend.

According to BBVA chief economis Alicia Garcia-Herrero, China's credit slowdown is also a supply problem in as far as banks are concerned about their assets' future quality. "China's (one year) deposit interest rate is marginally higher than inflation (3.5% versus 3.45) so a cut in rates would bring real interest rates even further down," she added.

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