Major Banks Rule Out China Rate Cuts for 2026 Amid Economic Stabilization

Major global investment banks have revised their forecasts for China’s monetary policy, now ruling out interest rate cuts for 2026. This shift comes as recent economic data indicates a period of stabilization within the world’s second-largest economy. Analysts suggest that signs of economic resilience and early recovery have reduced the immediate urgency for further monetary easing by the People’s Bank of China (PBOC). Furthermore, geopolitical tensions involving Iran have reportedly had a limited impact on China’s long-term monetary outlook. The transition to a 'hold' stance is expected to support the Yuan (CNY) while providing a neutral signal to equity markets such as the HSI and China A50. Market participants are now closely monitoring domestic conditions to gauge the sustainability of this recovery phase.