PBOC To Correct Procyclical FX Behaviour

Policymakers will correct unilateral and procyclical behaviour to keep the yuan stable and avoid overshooting, according to the People’s Bank of China. At its recent Q3 Monetary Policy Committee meeting, the central bank said it would strengthen government investment and policy incentives to stimulate private investment, and increase support for key areas like inclusive finance, green development, technological innovation, and infrastructure construction. On housing, the PBOC said it would facilitate an adjustment mechanism for new first-home loan interest rates, and promote the implementation of lowering existing first-home loan interest rates. Overall, authorities believe the domestic economy continues to recover but demand remains insufficient. (Source: PBOC Website)