CHINA is very likely to exit from some of its stimulus measures as the economy improves, but there won’t be any interest rate hike soon, a leading newspaper said on its front page Thursday.

“If previous rounds of withdrawing stimulus policies are a guide, ‘tight money’ and ‘tight credit’ are inevitable, and policy rate hikes are also normal,” China Securities Journal said. “However, we shouldn’t see the monetary authority proactively raising the policy rate for some time to come.”

While the newspaper didn’t attribute its view to any policymaker, citing mainly economists instead, a front-page story could be seen as an official signal of policy.

Officials have been talking about gradually winding back its stimulus since the summer, alongside evidence of a rebounding economy fueled by strong export growth and a coronavirus outbreak that’s now under control domestically. The People’s Bank of China remains on course to taper its emergency support even as a string of defaults by government-linked companies sent tremors through the credit markets recently.

The central bank has taken a measured approach to monetary support this year, lowering interest rates, injecting liquidity and giving businesses loan repayment holidays, but has refrained from the massive stimulus seen elsewhere. Governor Yi Gang told market participants as early as June to start thinking about an exit from the looser financial policies.

Liu Guoqiang, a vice governor at the central bank, said earlier this month that an exit is likely “sooner or later” and will be driven by the recovery. Former Finance Minister Lou Jiwei said almost two weeks ago that it was time to study an orderly exit of loose monetary policies.

Government bond yields have risen sharply since the middle of the year amid signs of an economic recovery and expectations of a withdrawal of monetary stimulus.

(SD-Agencies)