The People’s Bank of China (PBOC) vowed to keep monetary policy; prudent, flexible and moderate in a statement posted Sunday on its website outlining its policy agenda for 2020.
The PBOC added that it will take action to defuse financial risks, and improve its macroprudentia regulations. The statement also said it will strengthen countercyclical adjustment to maintain reasonably abundant liquidity, and to promote credit growth in line with economic development.
The statement echoed the PBOC’s earlier decision to cut required reserve ratios for commercial lenders by 50 basis points, which is estimated to unleash about 800 billion yuan ($115 billion) of liquidity into the financial system. The policy took effect on Monday.
Economists from Nomura International (Hong Kong) Ltd. said the cut signals Beijing’s heightened concerns of economic growth headwinds, credit contraction pressure in some places, and an upcoming liquidity shortage ahead of and during the Lunar New Year holiday.
Read the full story on Caixin Global later today.
Contact reporter Guo Yingzhe (yingzheguo@caixin.com)
Related: More Cuts to Banks’ Reserve Requirement Under Consideration, Premier Says
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