China’s Central Bank Pledges Timely Adjustments to Policy Tools

CFP

The People's Bank of China, Beijing, China.

China’s central bank has pledged to make timely adjustments to its monetary policy tools and support the issuance of panda bonds, Reuters reported, citing an official statement released on Sunday.

The People’s Bank of China (PBOC) said it would continue implementing an appropriately accommodative monetary policy and maintain ample liquidity, according to a summary of a work meeting held on Saturday to outline priorities for the second half of the year, Reuters reported.

The PBOC statement pledged to "steadily promote the ⁠high-level opening of the financial market... advance domestic and international infrastructure cooperation, and enrich liquidity management and risk hedging tools."

It would "continue to financially support debt risk resolution of local government financing vehicles, and promote their market-oriented transformation," it added.

The central bank said it would also support more overseas institutions in issuing yuan-denominated bonds, known as panda bonds. It added that it would help Shanghai expand cross-border financial activities and offshore financial services, while further strengthening Hong Kong’s role as an offshore yuan hub.

The meeting, chaired by PBOC Governor Pan Gongsheng, followed a call by the Communist Party’s Politburo on Thursday to accelerate fiscal spending on already approved infrastructure projects during the remainder of the year.

Data released last month showed China’s economy grew by 4.3% in the second quarter, marking its weakest expansion in more than three years and falling below the lower end of the government’s full-year growth target of 4.5% to 5.0%.

The Politburo, a top party decision-making body, acknowledged "difficulties and challenges facing the economy" at its meeting, the official Xinhua news agency said.

China must "accelerate the pace of ⁠fiscal expenditure" and enhance the flexibility and forward-lookingness of monetary policy, a summary of the discussion showed, according to Reuters.



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