Cycle could take 10 years to complete
China’s decision to reduce bank reserve requirements could signal the start of a monetary easing cycle in the country. And that could bode well for the gaming industry in Macau, which is in its 11th consecutive month of decline.
According to the Macau Business Daily, the study indicates Macau’s VIP sector could benefit by the decision of the central government to reduce the commercial banks’ reserve requirements.
“Lowering reserve requirements signals China’s economy has entered a monetary easing cycle, which may be a positive catalyst for China’s economy, and thus bodes well for Macau’s VIP economy recovery,” according to the study.
The authors agree with many analysts that Macau may rebound as it diversifies its economy and weans itself from its reliance on high-roller business. A more robust mass-market sector “should lead to a more sustainable business model,” the authors wrote. However, they add, it could take a decade for the tide to fully turn.
