Zou Lan, head of the People’s Bank of China’s (PBOC) monetary policy department, in an interview with state media outlet Xinhua News Agency on Tuesday, hinted a further policy easing by the central bank.
Key comments:
- The PBoC may use open market operations, medium-term lending facilities and reserve requirements among other monetary policy tools to provide “strong” support for reasonable credit growth.
- PBoC will strengthen its counter-cyclical and cross-cycle policy adjustments to create favourable financial conditions for the country’s economic growth.
- PBoC will also take measures to prevent funds from clogging and idling while guiding financial institutions to strengthen their liquidity risk management for stable money market operations.
Market reaction:
The Chinese Yuan, meanwhile, reacts little to headlines, with the USD/CNH pair trading around the 7.1840 level or nearly unchanged for the day.
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