Beijing, 4 April 2024 (TDI): The People’s Bank of China (PBOC) announced on Wednesday its commitment to accurately and effectively implement a prudent monetary policy, focusing on counter-cyclical adjustments to expand domestic demand and boost confidence.
A statement was issued after a quarterly meeting of its monetary policy committee. According to it, the PBOC emphasized its support for banks to replenish capital. They aim to guide financial institutions to increase medium- and long-term loans to the manufacturing industry.
By lowering borrowing rates, this action seeks to aid in the recovery of the economy. The advantage is that it serves both individuals and enterprises.
The monetary policy committee of the PBOC heavily influences these measures.
Financial institutions encourage lending to industries prioritizing emission reduction.
In addition to this, the PBOC’s approach calls for banks to relocate their services closer to the community. The emphasis is laid on concentrating on their primary business operations for smaller banks.
Economic data for January–February and a recent factory owners survey for March indicated a positive start to the year for China’s economy. It offers relief to policymakers as they work to revitalize the economy post-lockdown.
While acknowledging the upward trend in economic operations, the PBOC highlighted challenges. These included the inadequacy of effective demand and weak social expectations.
To address these challenges, the central bank plans to enhance the implementation strength of introduced monetary policies and maintain reasonably ample liquidity. Additionally, it aims to manage a “mild rise” in prices and keep them at a reasonable level amid deflationary pressure.
Also Read: China says Pak-China alliance resilient against terrorism
The PBOC also stressed the importance of major banks. It plays a significant role in providing financial services to the real economy.
This proactive stance by the PBOC reflects China’s ongoing efforts. The aim is to navigate economic recovery while ensuring stability and resilience in its financial system.
){kind=link}