PBOC aims for stable growth with 'prudent' monetary policy
Source: Bloomberg News |
August 3, 2012, Friday
|
Print Edition
Print Edition
CHINA'S central bank said it will keep pursuing a "prudent" monetary policy and the economy will maintain stable growth even amid the risk a global recovery will falter.
China will conduct policy fine-tuning at an appropriate time and consumer inflation may rebound after August, the People's Bank of China said in a quarterly monetary policy report on its website yesterday.
The yuan's exchange rate will be kept "basically stable," the central bank said.
Chinese authorities are concerned that fallout from Europe's debt crisis will further hurt growth in the world's second-largest economy that has decelerated for six quarters.
"At present, the primary risk for the global economy is still the European debt crisis," the central bank said.
The possibility of Europe "triggering a double dip in the global economy can't be ruled out," it said.
The central bank reiterates government statements that China is focused on stemming the slowdown without preparing a stimulus comparable to the one announced in late 2008.
Surveys of purchasing managers due today will show whether an expansion in services industries picked up or decelerated in July.
Goldman Sachs Group Inc has lowered its forecast for China's economic expansion this year to 7.9 percent from 8.1 percent and for 2013 to 8.5 percent from 8.7 percent.
"We expect growth in China to accelerate in the rest of the year and 2013 as supportive policies are gradually rolled out and implemented," economists including Hong Kong-based Cui Li said in a research report.
Japan's Komatsu Ltd, the world's second-biggest maker of construction equipment, this week warned of slower Chinese demand. The company estimated sales in China may fall as much as 30 percent this year after earlier estimating growth of as much as 5 percent.
Central bank data yesterday indicated borrowing costs have declined, with June's weighted average loan interest rate at 7.06 percent compared with 7.61 percent in March.
The proportion of loans made above benchmark rates declined to 67 percent in June, versus 70 percent in March, the report showed.
The PBOC cut interest rates in June and July, the first reductions since 2008.
China will conduct policy fine-tuning at an appropriate time and consumer inflation may rebound after August, the People's Bank of China said in a quarterly monetary policy report on its website yesterday.
The yuan's exchange rate will be kept "basically stable," the central bank said.
Chinese authorities are concerned that fallout from Europe's debt crisis will further hurt growth in the world's second-largest economy that has decelerated for six quarters.
"At present, the primary risk for the global economy is still the European debt crisis," the central bank said.
The possibility of Europe "triggering a double dip in the global economy can't be ruled out," it said.
The central bank reiterates government statements that China is focused on stemming the slowdown without preparing a stimulus comparable to the one announced in late 2008.
Surveys of purchasing managers due today will show whether an expansion in services industries picked up or decelerated in July.
Goldman Sachs Group Inc has lowered its forecast for China's economic expansion this year to 7.9 percent from 8.1 percent and for 2013 to 8.5 percent from 8.7 percent.
"We expect growth in China to accelerate in the rest of the year and 2013 as supportive policies are gradually rolled out and implemented," economists including Hong Kong-based Cui Li said in a research report.
Japan's Komatsu Ltd, the world's second-biggest maker of construction equipment, this week warned of slower Chinese demand. The company estimated sales in China may fall as much as 30 percent this year after earlier estimating growth of as much as 5 percent.
Central bank data yesterday indicated borrowing costs have declined, with June's weighted average loan interest rate at 7.06 percent compared with 7.61 percent in March.
The proportion of loans made above benchmark rates declined to 67 percent in June, versus 70 percent in March, the report showed.
The PBOC cut interest rates in June and July, the first reductions since 2008.
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