China’s central bank eyes ‘noticeable decline’ in interest rates to help drive growth
- People’s Bank of China says it will ‘make flexible use of multiple monetary tools to maintain reasonably ample liquidity … deepen interest rate liberalisation’
- Credit support for private firms will be ‘in line with their contribution to the economy and society’, it says
China’s central bank said it will work to produce a “noticeable decline” in market interest rates to support growth, as pressure on the economy mounts amid the trade war with the United States.
At its third-quarter conference, chaired by governor Yi Gang on Wednesday, the monetary policy committee of the People’s Bank of China said the international economic and financial environment remained complex as uncertainty and instability had increased.
“We must spare no effort to improve monetary policy transmission and insist on market-oriented reforms to promote a noticeable decline in real interest rates,” according to a statement released late on Friday.
“We should make flexible use of multiple monetary tools to maintain reasonably ample liquidity. At the same time, [we should] deepen interest rate liberalisation, improve the loan prime rate regime and promote its use in practice.”
We must spare no effort to improve monetary policy transmission and insist on market-oriented reforms to promote a noticeable decline in real interest rates
At a press conference on Tuesday, Yi sought to distance China’s monetary policy from the aggressive easing being carried out by the European Central Bank and the US Federal Reserve, saying the PBOC would rely instead on fine-tuning of its policy in line with the domestic economy and consumer prices.