China’s central bank, the People’s Bank of China (PBOC), announced on Thursday that it will adjust its monetary policy “at the appropriate time” to bolster the economy amidst growing external challenges.
In its fourth-quarter monetary policy implementation report, the PBOC acknowledged the intensifying adverse effects of changes in the external environment, coupled with persistent domestic challenges such as insufficient demand and various potential risks.
The central bank stated its intention to comprehensively utilize its monetary policy toolkit, including interest rates and the bank reserve requirement ratio (RRR), to “adjust the intensity and pace of policy measures based on domestic and international economic and financial conditions.”
The PBOC also committed to maintaining ample liquidity, promoting a “reasonable rebound” in prices, and ensuring the yuan exchange rate remains “basically stable at a reasonable and balanced level.”
Since September, Chinese policymakers have implemented a series of stimulus measures, including interest rate cuts, cash injections, and initiatives to address the hidden debt of local governments. They have also pledged to introduce further measures this year to support economic growth.
Faced with deflationary pressures and increasing headwinds to its already faltering growth, Chinese leaders abandoned their long-held “prudent” monetary policy stance in December, adopting a “moderately loose” posture instead.
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