The People's Bank of China is not eager to back the Chinese economy. The regulator announced that it did not plan to stimulate economic growth or take any special measures to accelerate it.
China's central bank stated that despite forecasts of monetary policy adjustment, it would remain unchanged in the near future. Moreover, the PBoC has been one of the few regulators in the world to refuse to provide any large-scale stimulus package to back its own markets. According to the deputy governor of China’s central bank, Pan Gongsheng, sufficient measures have been taken to implement monetary policy at the moment. The official referred to the reduction in reserve requirements, the amount of funds that banks must keep in a special account at the central bank or in cash in their vaults. The key interest rate remained at the previous level of 3.85%.
Sun Guofeng, the head of the central bank's monetary policy, gave more detailed comments on the financial institution's intentions. He stated that current economic conditions might not require as much liquidity as during the peak of the COVID-19 pandemic. Guofeng added that the regulator had sufficient tools to ensure market liquidity.
"Overall, Sun's comments suggest that the PBoC has not altered its prudent policy stance despite stiffened economic headwinds," Aidan Yao, senior emerging Asia economist at AXA Investment Managers said.
