Zhou sees no adjustment in policy but may fine-tune when needed
Print Edition
China won’t adjust its monetary policy drastically for the remainder of the year as the “economic situation is good” but will fine-tune the prudent monetary policy when needed, the central bank governor said yesterday.
“China’s economic situation is good and economic growth of 7.5 percent is at a normal level,” People’s Bank of China Governor Zhou Xiaochuan said in an interview with CCTV.
He reiterated the economy isn’t short of liquidity, and the PBOC will continue with its prudent monetary policy with a “slight” adjustment if necessary.
His comments were made amid jitters over what the government will do to revitalize a slowing economy.
The country’s gross domestic product slowed from 7.7 percent in the first quarter to 7.5 percent in the second three months, defying market expectations for a mild recovery.
Analysts wonder whether the government will resume plans to invest in infrastructure that could add to the liability pressure of banks and hurt its aim of lifting domestic consumption.
“We will strive for a balance between maintaining relatively sound economic growth and improving structure,” Zhou said.
On interest rate liberalization, Zhou said the central bank is ready to free deposit rate as soon as possible. The PBOC last month removed the lending rate floor that was set at 30 percent off the benchmark.
Zhou also said the PBOC is determined to keep the yuan stable at a “reasonable” level against the US dollar.
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