The People’s Bank of China (PBOC, central bank) promised to “further” intensify its support for technological innovation and the promotion of consumption in 2025, amid the Asian giant’s efforts to reactivate its economic growth, official sources reported.
In a statement released at the end of its annual work conference, held from January 3 to 4, lThe monetary authority also committed to exploring institutional measures to guarantee the “stable functioning” of the capital market.making “adequate and full use” of its two new tools for injecting liquidity into the financial system.
Likewise, the BPC reiterated that it will implement a “moderately flexible” monetary policy throughout this year to create “an adequate monetary and financial environment that favors economic growth.”
In this sense, the Chinese central bank stressed that it will choose to reduce the bank reserve ratio (RRR, percentage of funds that a bank cannot lend) and lower interest rates “when appropriate”, with the objective of “maintaining abundant liquidity and stable growth.”
The Politburo, the second echelon of command of the Communist Party (CCP), had already announced at the beginning of December that it would bet on a “moderately flexible” monetary policy in 2025, which represents the first change in position after 14 years defining it as “prudent.”
Low national and international demand, together with risks of deflation, insufficient stimuli, a real estate crisis that has not bottomed out or a lack of confidence among consumers and the private sector are some of the factors that currently cause most concern in the second largest world economy.
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