Room for monetary policy is relatively small – PBOC’s Lu

FXStreet - Lu Lei, PBOC's Research Bureau Head crossed the wires earlier on the day, noting that deflation pressure as well as yuan exchange rate volatility is expected to rise this year.

Key Quotes:

Monetary easing to add capital outflow pressure

Room for monetary policy is relatively small

Rate/RRR cut to fuel financial risk accumulation

Easing monetary condition to boost leverage ratio

Sees increasing risks with corporate debt

Deflation pressure to rise in 2016

Sees 2016 gdp at around 6.5%, forecasts CPI around 1.3%

2016 M2/Total social financing growth between 11-13%

Yuan exchange rate volatility to rise in 2016