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PBOC Chief: Won’t make big reserve requirement ratio cuts

China won’t engage in aggressive moves to ease monetary policy like other global central banks, as the economy is still performing within expectations, the Chinese central bank’s governor Yi Gang said on Tuesday. Read More...

BEIJING — China won’t engage in aggressive moves to ease monetary policy like other global central banks, as the economy is still performing within expectations, the Chinese central bank’s governor Yi Gang said on Tuesday.

At a briefing to celebrate the 70th anniversary of China’s founding, Yi said Beijing won’t go down the road of releasing huge amounts of credit, including by resorting to negative interest rates.

“Our room is relatively large” for monetary and fiscal measures, but Beijing should “stretch out” its policies, Yi said, referring to the need to save ammunition for the economy. “We should appreciate the room for normal monetary policy,” he said, adding China’s current interest-rate level was appropriate.

China has been struggling with sluggish demand and sagging confidence among businesses and consumers, as well as surging pork prices amid an outbreak of African swine fever. Beijing has been trying to pump more credit into the private sector, although it has yet to resort to drastic moves like cutting interest rates.

Chinese leaders have warned that they won’t go back to stimulus moves at a scale similar to those seen after the global financial crisis a decade earlier. Yi said economic growth was within a reasonable range and inflation was relatively mild.

Yi also mentioned the recent bailout of two Chinese banks, saying that shareholders of smaller banks should take more responsibility, and that authorities were working to rein in financial risks.

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