China’s central bank said on Wednesday that it will increase policy changes and implement monetary policy in a “precise and forceful” manner to support an economy that was showing “increasing momentum” in its recovery.
The People’s Bank of China (PBOC) said in a statement following a quarterly meeting of its monetary policy committee that it will keep liquidity reasonably sufficient while maintaining stable credit expansion.
“The current outside environment has grown more complex and severe, global trade and investment have slowed down, inflation is still high, and the interest rates in advanced nations remain high,” the bank stated.
“The nation’s economy is continuing to recover and improve, gaining momentum, but nevertheless faces challenges like insufficient demand.”
“We must continue to work hard to take advantage of this improving growth, step up macro policy modifications, implement cautious monetary policy measures in a precise and forceful manner,” the Bank of China stated.
The language in the recent statements was consistent with the central bank’s previous stance, however the views on the economy appeared slightly more encouraging, as the PBOC had stated in its April announcement that the recovery needed stable underpinnings.
After a flurry of modest policy measures, the world’s second-largest economy appears to be stabilizing, but the outlook is clouded by a property crisis, aging demographics, excessive debt, and geopolitical concerns.
According to the central bank, it would direct banks to decrease borrowing costs for businesses and households while also assisting banks in replenishing capital.
According to the central bank, China will increase government investment and regulatory incentives to drive private investment and accelerate price recovery from a low level.
The PBOC reiterated its commitment to keeping the yuan steady and avoiding currency overshooting.
The central bank also vowed to foster the healthy and steady growth of the real estate market by enacting measures that reduce down payment requirements and mortgage rates for some home buyers.
According to the central bank, it would increase its support for the construction of public infrastructure in megacities for both normal and emergency use, the transformation of “urban villages” or neglected areas, and cheap housing.
As part of its efforts to support the economy, the cabinet set rules to increase investment in such areas.