MNI POLICY: PBOC to Promote Growth, Keep Yuan Stable: Yi

The People's Bank of China (PBOC) will initiate structural monetary policies to boost the economy and keep the yuan stable in 2021, Governor Yi Gang said in an interview with Xinhua News Agency published late Friday.

“The PBOC will ensure the sustainability of the normal monetary policy," said Yi.

He said the economy faces no pressure from exiting the previous stimulus measures given that China has refrained from zero or negative interest rates and has shunned excess liquidity.

The PBOC's policies will specifically aid key sectors including small firms, technology and green development, deepen reform to ensure lower borrowing costs, improve policy rate regime and smoothen the transmission of loan prime rate (LPR) to bank lending, Yi said.

Other key points by Yi in the Xinhua interview:

- The PBOC would follow market-based yuan exchange rates, the managed floating regime and properly guide market expectations.

- China's overall debt ratio was likely to normalize this year, and debt levels have already slowed since Q3.

- The PBOC would scrutinize deposit services by fintech companies to safeguard market order and stabilize lenders' borrowing costs.

- The PBOC would help lenders expand credit to small businesses and manufacturing, and relax requirements on loan collaterals and bolster corporate bond issuance.