China’s central bank intends to carefully calibrate the intensity and pace of its “moderately loose” monetary policy implementation, taking steps to help the country’s economy grow by Beijing’s goal of around 5 per cent this year.
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Zou Lan, deputy governor of the People’s Bank of China, said on Monday that the agency would closely monitor and evaluate the transmission and actual effects of previously implemented measures. And any future steps would be based on domestic and international financial and economic conditions, as well as the performance of financial markets.
“Monetary policy operates with a lag, and the full impact of current measures is still unfolding,” Zou said at a press conference. “The PBOC will continue to implement a moderately accommodative monetary policy.
“This approach aims to more effectively stimulate domestic demand, stabilise public expectations, invigorate market vitality, and support the achievement of this year’s economic and social development goals and tasks.”
In May, the PBOC announced a raft of supportive measures to shore up China’s economy and stabilise capital markets against the backdrop of trade negotiations with the United States. The reserve requirement ratio – the amount of cash that commercial banks must hold as reserves – was cut by 0.5 percentage points, and the seven-day reverse repo rate – a benchmark interest rate – was lowered by 0.1 percentage point to 1.4 per cent. The rate of housing accumulation fund loans and relending facilities rate were also slashed by 0.25 percentage points.
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