PBoC to continue to do its part to stabilise China's economy

China's economy is weakening and the PBoC will continue to do its part to stabilise the economy. Risks are clearly skewed towards more easing in case the economy continues to weaken.

"One more policy rate cut and two more RRR cuts are the expectations from PBoC", says Nordea Bank. 

The heavy central bank intervention to fend off depreciation pressure since mid-August has caused the CNY (and the CNH) to stabilise. Markets are still bearish but stability will remain due to the potential inclusion of the CNY in the IMF's SDR basket.