MNI EXCLUSIVE: PBOC Has Options, Tools If Econ Slows: Fan Gang

--Further RRR Cuts Are Likely: Former Policy Advisor

     BEIJING (MNI) - The People' Bank of China still has plenty of options and

ammunition to use if the economy slows, including further reductions in the

reserve requirement ratio, a former senior central bank official told MNI.

     "The PBOC has plenty of measures to cope with economic problems, including

the use of both quantitative and price tools," said Fan Gang, formerly a member

of the central bank's Monetary Policy Committee and now a professor at the

graduate school for the Chinese Academy of Social Science.

     "The RRR is still high at present and in long term, the RRR will continue

to be cut," Fan said.

     With the economy showing some signs of slowing as the trade war with the

U.S escalates, the PBOC cut the RRR by 100bps on October 7 to 14.5% for large

banks and 12.5% for smaller banks, effective Oct 15, releasing a net of CNY750

billion of liquidity into the economy. It followed on from a 100bps RRR cut in

July.

     China's leadership is looking for GDP growth of 6.5% in 2018, but many

economists fear headwinds from the deepening trade dispute with the U.S. could

slow the economy, with many fearing a slowdown to as low as 6.2%.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MC$$$$,MI$$$$,MT$$$$,MX$$$$]