China’s central bank reiterated it will implement a targeted and prudent monetary policy in 2023, and provide support to domestic demand.
(Bloomberg) — China’s central bank reiterated it will implement a targeted and prudent monetary policy in 2023, and provide support to domestic demand.
The People’s Bank of China said it will “comprehensively use multiple monetary policy tools, and keep liquidity reasonably ample.” The remarks in a statement Wednesday followed the PBOC’s annual work conference.
The PBOC is expected to keep monetary policy loose for at least the next few months, with the economy still suffering disruption from widespread virus infections following the nation’s abrupt exit from its Covid Zero stance.
Monetary stimulus in 2023 will be at least as strong as last year, and policy will be focused on supporting domestic demand, officials have recently said.
The PBOC is also viewed as having more space for easing this year given expectations for the Federal Reserve to conclude its interest-rate hikes, providing support for the yuan against the dollar.
Speculation is growing for an upcoming reduction in China’s five-year loan prime rate. A lowering of that reference for mortgage rates may help stimulate housing demand.
Digital Yuan
The PBOC added that it will provide support for the recovery and expansion of consumption, and for major infrastructure projects. It also pledges to support the “stable and healthy development” of the property sector.
The central bank also aims to continue to prevent financial risks and push forward the digital yuan pilot scheme in 2023, it said.
–With assistance from Jing Li.
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