PBOC Should Focus More On Quantitative Tools: Advisor

The People’s Bank of China should give more emphasis on the use of quantitative tools at the moment, as lowering policy interest rates will further invert the Sino-U.S. spread and may add to the pressure of capital outflows, said NetEase Finance citing a former director of the PBOC’s Statistics and Analysis Department. Sheng also noted prices tend to rise due to imported inflation and likely rising pork prices, the newspaper said. The PBOC should maintain the basic stability of the yuan at a balanced level and if necessary, the forex deposit reserve ratio can be further lowered from the current 8% and the counter-cyclical adjustment factor can be restarted, said Sheng.