China central bank to make monetary policy flexible, targeted, appropriate

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FILE PHOTO: Man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing
FILE PHOTO: A man wearing a mask walks past the headquarters of the People’s Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020. REUTERS/Jason Lee

June 28, 2021

BEIJING (Reuters) -China will make its monetary policy flexible, targeted and appropriate, while keeping interbank liquidity reasonable, the central bank said on Monday, as authorities seek to consolidate a post-COVID-19 economic recovery.

China’s economy has staged a strong rebound from the impact of the COVID-19 pandemic, with Chinese exporters racing ahead to fill global demand bolstering the vast industry sector, but the recovery in the consumer end has been weak.

The People’s Bank of China (PBOC), in a statement on its website after a quarterly meeting of the monetary policy committee was concluded, flagged a still-complicated internal and external environment facing the Chinese economy.

It would step up forecasts and analyses of both the domestic and global economy, seek greater international economic policy coordination and fend off external shocks to support growth.

A recent move to reform the way banks calculate deposit rates and continued efforts to unleash potential from previous loan prime rate reforms will help drive a further decline in real lending rates, the PBOC said.

Authorities will make use of relending, re-discounting and other monetary tools that would directly help the real economy, said the PBOC.

China will increase flexibility of the yuan exchange rate, PBOC reiterated, although that the currency would be kept stable within a reasonable and balanced range.

(Reporting by Stella Qiu and Kevin Yao; Editing by Toby Chopra and Bernadette Baum)