Chinese Government announce rescue package
November 10, 2008
Today the Chinese Government announced a $586bn rescue package, a package similar to those provided by other G20 nations. In an attempt to minimize the impact of the global slowdown the Chinese Government pledged that the stimulus package will be spent by 2010 and will be focused on industries such as affordable housing, infrastructure, the power grid, technical innovation and environment protection. In conjunction with the rescue package the People’s Bank of China (PBOC) sighted a shift in the country’s monetary policy stance to “moderately easy” from prudent and flexible”, indicating potential rate cuts in the future. As a result of this latest initiative emerging markets and their respective currencies rallied although the Japanese Yen which is often a proxy for non tradable Asian currencies saw very little price action.