0938 GMT - China is expected to further ease its monetary policy settings, but only in a calibrated, targeted way, says BNP Paribas's Wei Li. The PBOC's "moderately loose" stance leaves room for measures including RRR cuts and interest-rate adjustments. However, Li cites three main constraints that limit aggressive easing: imported inflation from oil-price spikes; currency stability pressures as the dollar strengthens on safe-haven flows; and financial risk concerns amid property-sector vulnerabilities. A prolonged Middle East conflict is shifting priorities toward financial-market stability and energy security, with policymakers wary of oil-driven cost pressures, Li says. "China's relative insulation from direct energy shocks (compared to Japan and Korea) provides some policy autonomy, but external volatility necessitates careful calibration between domestic support and external stability," Li says. (jihye.lee@wsj.com)
(END) Dow Jones Newswires
March 20, 2026 05:38 ET (09:38 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.

