China pledges ample liquidity for economy

China’s central bank chief stated on Monday that the government would back a moderately loose monetary policy to ensure sufficient liquidity, aiming to boost the economy and mitigate the effects of geopolitical uncertainties.

Pan Gongsheng, governor of the People’s Bank of China (PBC), said the central bank would utilise a range of tools, including interest rates and required reserve ratios, to provide liquidity in the market.

The comment highlights Beijing’s dedication to using potentially its most forceful monetary measures to stimulate the world’s second-largest economy.

Pan announced at the Asia Financial Forum in Hong Kong that the central bank plans to significantly boost the country’s foreign exchange reserves through asset allocation in Hong Kong, but did not offer specific information.

The PBC chief stated that Beijing will assist the Hong Kong Monetary Authority (HKMA) in utilising a “swap fund” programme to boost liquidity in the offshore yuan market.

Attribution: Reuters

Subediting: Y.Yasser