THE central bank said yesterday that economic growth remains resilient despite relatively large downward pressure and mounting external uncertainty. The People’s Bank of China (PBOC) will work on preventing and defusing financial risks amid “profound changes” in the domestic and international economy, it said in a statement following the fourth quarter meeting of its monetary policy committee, which Governor Yi Gang chairs. The PBOC said it will keep the yuan exchange rate balanced and stable at reasonable, equilibrium levels and use multiple monetary tools and flexible policy to maintain liquidity. It also said it will keep M2 money supply and social financing growth in line with nominal gross domestic product (GDP) growth. Though economic activity has shown hints of a pickup recently, analysts widely expect China to roll out further stimulus measures in 2020 to avert a sharper slowdown. The central bank said it’ll keep monetary policy flexible and work to lower funding costs for businesses as the economy still faces strong headwinds. The PBOC will also work to ensure the transmission of monetary policy and use market-focused reform mechanisms to lower the real interest rate for loans, according to the quarterly report. It will maintain a balance between steady growth and risk prevention, it said. The comments came as China’s economy appears to be reaching the end of a cyclical bottom with improving global demand and the prospect of a phase one trade deal with the United States buoying sentiment. Policymakers have issued a wide range of measures to keep the momentum going into 2020, from allowing freer movement of labor to pledging more support for private firms. Meanwhile, the PBOC ordered banks to price all lending using the new benchmark starting this month, a move that could help reduce overall borrowing costs for businesses and households. The central bank also repeated its pledge to maintain sufficient liquidity, according to the statement. (SD-Agencies) |