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QINGDAO TODAY
在线翻译:
szdaily -> Business -> 
‘Rich’ tools enable PBOC to cope with uncertainties
    2019-05-13  08:53    Shenzhen Daily

THE central bank said Friday it is fully able to cope with external uncertainties, as it has “rich” policy tools and ample policy room to maneuvre.

The comments came just hours after the United States raised tariffs, which threaten to increase pressure on the Chinese economy.

“Facing internal and external economic changes, our country’s monetary policy has ample room (to respond) and our money policy toolkit is rich,” Sun Guofeng, head of monetary policy department of the People’s Bank of China (PBOC), told reporters in Beijing.

“We are fully able to cope with various internal and external uncertainties.”

The senior central bank official pledged to keep liquidity reasonably ample while sticking to a “prudent” monetary policy that’s neither too loose nor too tight. He added that he expected money supply and credit growth to remain steady.

Sun said the central bank will “better use” structural policy tools including its targeted medium-term lending facility (TMLF), relending and rediscount to support private and small firms, without elaborating.

At the same time, it will use policy tools to conduct open market operations in a flexible way and guide money market rates within a “reasonable” range, the official said.

Central bank data Thursday showed Chinese banks throttled back new lending in April after a record first quarter that sparked fears of more bad loans, suggesting the central bank was fine-tuning policy in light of recent encouraging data and concerns about a rapid rise in debt.

Other data Thursday also showed price pressures in China were rising.

The central bank last week announced a cut in reserve requirement ratios (RRR) for some small and medium-sized banks.

Ma Jun, a central bank adviser, said Friday that the new tariffs could cut China’s growth by 0.3 percentage points but the strengthening economy has become more resilient to external shocks.

The comments were published by the Finance News, a paper run by the central bank.

Ma said that China would impose corresponding counter measures.

“The negative impact of this scenario on China’s gross domestic production would be around 0.3 percentage points, this is within a controllable range,” he said.

The Chinese stock market was also unlikely to see the same heavy selloff it experienced last year after the trade war began, he said, adding that investors had previously been prone to overreacting due to an inability to judge the real impact of trade frictions and jitters over slowing economic growth.

“China’s real economy performance has improved significantly in recent months ... China’s current macroeconomic and policy environment should help the market improve its resilience to new external shocks,” he said.

He also said that the central bank would look to fine-tune policy according to changes in the country’s economic situation.

(SD-Agencies)

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