MNI BRIEF: PBOC To Cut Rates, RRR For Economy: Pan
MNI (BEIJING) - The People’s Bank of China will reduce interest rates and the reserve requirement ratio to maintain ample liquidity and support financing of the economy, said Governor Pan Gongsheng on Monday in Hong Kong according to a statement on the PBOC’s website.
The focus of China's macroeconomic policy will shift from an emphasis on investment to a more balanced approach with consumption, he said, noting efforts will be made to expand spending by increasing household income, enhancing consumption subsidies, innovating supply, and improving social security. (See MNI: PBOC To Aim To Drive Inflation Higher- Advisors)
The external environment remains complex and volatile, posing ongoing challenges to the economy as persistent geopolitical conflicts, rising trade protectionism, and uncertainties on global economic recovery have spillover effects on China, and internally, challenges persist, including insufficient domestic demand, weak social expectations, and low price levels, he warned.
However, risks in local government funding vehicles and the real-estate market have been significantly mitigated, he added.