The Shanghai Composite index dropped 7.4 per cent on June 26, 2015, when two-thirds of the listed stocks hit their 10 per cent daily downward limit. Since June 12 intra-day peak the index has lost 19 per cent. On June 27, the People’s Bank of China (PBoC) cut both deposit and lending rates by 0.25 per cent and the reserve requirement ratio by 0.5 per cent for agricultural and SME companies. Analysts assess that while the monetary easing itself may not have been prompted by the stockmarket fall on the 26th June, but the timing would have been. Noting that the real exchange rate has been rising because of the yuan’s peg to the US dollar and also because, with inflation in decline, real interest rates have barely fallen, analysts are of the view that the stockmarket is an obvious bubble as is real estate and feel that a dual shake-out of both markets seems to be in prospect.