PBOC to Keep Monetary Policy On Hold for as Long as Possible: Governor Yi

According to PBOC Governor, Yi Gang, China is not keen on easing its monetary policy anytime soon, unlike other leading central banks around the world. Yi made these comments at a press briefing as part of China’s 70th anniversary.

Although China had recently cut its one-year benchmark lending rate for the second consecutive month, it was a very slight change, especially in comparison with recent interest rate cuts seen from the Fed and other central banks recently. Yi remarked that China’s macroeconomic policies offer ample flexibility to maneuver, in both fiscal and monetary fronts.

The PBOC is keen to maintain monetary policy at normal levels for as long as possible. Despite recent weakness in the Chinese economy on account of the escalating trade war with the US, the PBOC has managed to resolve key issues in the areas of shadow banking and keep financial risks under control.

In order to boost spending and control debt, the Chinese government has previously rolled out fiscal stimulus measures and offered tax cuts amounting to trillions of yuan. The government has also previously rolled out special local government bonds as a means to raise funding for key infrastructure projects being undertaken.