Central Bank Chief Stresses Ample Room to Adjust Interest Rates, Reserve Ratios
There’s still ample room for China to adjust banks’ interest rates and reserve requirement ratios, said China’s central bank Governor Yi Gang in Bali, Indonesia on Sunday.
China can achieve its 2018 growth target of around 6.5%, which the government set at the start of the year, or “maybe a little bit higher,” Yi told an international banking seminar that coincided with meetings of the International Monetary Fund and the World Bank.
Yi’s speech comes after the country announced on Oct. 7 this year’s fourth targeted cut to most banks’ reserve requirement ratios, freeing up more than $100 billion of liquidity into the banking system in a bid to boost slowing domestic growth amid escalating trade tensions with the U.S.
Growth in China’s consumer price index (CPI) for 2018 is expected to be slightly more than 2%, while the producer price index (PPI) is estimated to grow between 3% and 4%, Yi said.
China’s current account surplus for 2018 is expected to be less than 1% of the country’s gross domestic product (GDP), Yi said, indicating the world’s second largest economy has relied more on domestic demand.
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