BofA Merrill Lynch said the unexpected event of Brexit induces downside risks on Asia ex Japan well beyond the trade/investment channel.
The research house cut its China 2016 GDP forecast by 0.2pp to 6.4% yoy, which is based on the view that the PBoC will likely allow faster yuan depreciation against the dollar, pushing USDCNY closer to BofAML's forecast trajectory of 6.8 and above in the coming months.
Consequently, it will likely trigger capital outflow and cause an involuntary tightening in domestic financial condition, BofAML added. It maintained its 2017 growth forecast unchanged at 6.5%, because policy response will likely step up again by the time polic
makers see growth disappointment emerge in 4Q 2016.
27/06/2016 11:57
[I-bank focus]BofAML cut China 2016 GDP to 6.4% from 6.6%
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