MNI China Press Digest March 30: Rate Hikes, Sanctions, ESG

Highlights from Chinese press reports on Thursday:

• World monetary authorities should jointly consider if raising interest rates by a further 25-50bp is appropriate in a highly volatile global environment, according to Lu Lei, deputy director of the State Administration of Foreign Exchange. Speaking at the Boao Forum, Lu said liquidity secures economic stability, along with growth and inflation. In China, the central bank uses its open market operation to adjust liquidity needs of the financial system, he adds. When good banks and financial institutions run into difficulty due to liquidity issues, central banks should provide relevant support, he noted.
• US sanctions against Russia have undermined the US dollar's integrity and caused a crisis of trust around the world, according to Zhu Min, former vice president of the International Monetary Fund. Recent events increased the need to diversify away from the dollar, with the yuan an alternative that benefits from a high level of trust, Zhu said on the sidelines at the Boao Forum. Citing the recent CNY loan cooperation agreement between Saudi Arabia and China, he said a lack of exchange-rate risk when using yuan to purchase Chinese goods made trade more convenient.
• China's financial market will support the green transition by balancing long- and short-term goals, and through the development of derivatives products, according to Zhou Xiaochuan, ex-governor of the People’s Bank of China. Speaking at the Boao Forum in Hainan, Zhou said China will take steps to strengthen regulation of the carbon market and use price-based and non-price based policy tools to implement carbon neutrality. (Source: China Securities Daily)