China’s PBOC vows to boost confidence, support economy

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(March 30): China’s central bank vowed to boost confidence and provide more effective support to the economy, amid mounting growth pressure from the country’s worst Covid outbreak since Wuhan. 

The People’s Bank of China reaffirmed it will step up the magnitude of monetary policy and make it more forward-looking, targeted and autonomous, according to a statement Wednesday. 

The central bank will “further unclog the transmission mechanism of monetary policy” and expand the relending program for small and rural businesses, a meeting by the monetary policy committee chaired by Governor Yi Gang concluded, according to the statement. 

The remarks came as China’s economic outlook worsened as fears mounted of an expanding lockdown in Shanghai and with Covid infections elsewhere continuing to rise. Economists have cut their growth forecasts for this year. 

The PBOC acknowledged escalating geopolitical conflicts overseas and increasingly frequent Covid outbreaks domestically as among challenges faced by the economy. It reiterated it will keep liquidity reasonably ample and make credit growth more stable. 

The central bank kept key policy interest rates unchanged in March and hasn’t moved to reduce the amount of cash banks must hold in reserves, in spite of rising speculation after top financial leaders vowed to stabilize markets earlier this month.