How will China maintain liquidity?
2022.11.23 08:36
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How will China maintain liquidity?
Budrigannews.com – China will use other tools of monetary policy, including RRR, to maintain a reasonable level of liquidity, local media reported
Even after a flurry of policy measures this year to boost domestic demand, China’s economy has been struggling to get back on its feet due to restrictions on COVID-19 and a significant property downturn.
The State Council meeting on Tuesday, which was presided over by Premier Li Keqiang, stated that economic activity in the fourth quarter “is crucial for full-year growth.” Additionally, the meeting stated that the present moment was a “critical time” to strengthen the economy’s solid foundation.
“To maintain reasonable and sufficient liquidity, we will use monetary policy tools like cuts in the reserve requirement ratio in a timely and appropriate manner.”
In October, China’s economy experienced a significant slowdown, and a recent uptick in COVID-19 cases has increased concerns about the economy’s growth in the fourth quarter of 2022, given the country’s ailing property sector, high youth unemployment rate, and prolonged coronavirus restrictions under Beijing’s zero-COVID strategy.
Bank Reserves The People’s Bank of China (PBOC), which is in charge of the world’s second-largest economy and plots the fundamental course of China’s policies, typically follows the cabinet’s instructions.
According to CCTV, China’s economic operations will remain within a reasonable range and the country will strive for relatively good outcomes. The report also stated that previous fiscal and financial policies were having an effect, but they still had great potential.
The cabinet also pledged to support the platform economy’s sound development and called for consumption to stabilize and grow.
According to CCTV, China will push ahead with the implementation of special loans for home delivery and encourage commercial banks to issue new loans to support the sluggish housing market.
State media outlet Economic Daily reported on Monday that Deputy PBOC Governor Pan Gongsheng stated that the bank would provide loans totaling 200 billion yuan, or $27.33 billion, to six commercial banks for the completion of housing projects.
In a coordinated effort to support the country’s struggling property sector, three of China’s largest commercial banks have agreed to provide fundraising assistance to property developers, including Vanke, the industry giant.
In a major effort to alleviate a liquidity crunch that has afflicted the sector since mid-2020, the PBOC issued a notice on Wednesday outlining 16 steps to support the property industry, including loan repayment extensions.Citing sources, Reuters reported on the rescue package last week.
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