The People’s Bank of China (PBOC) would provide “strong and stable” support for the real economy under its “prudent” monetary policy that would be precise and forceful, the bank said in its first-quarter monetary policy implementation report.
“The current external environment is becoming more complex and severe, and the internal driving force of the domestic economy is still not strong, and demand is still insufficient,” the central bank said.
The “scarring effect” of the COVID-19 had not faded as the sustainability of China’s consumption recovery faced risks and the employment pressure on young people was high, while a slowing global economy was adding pressures on external demand, the bank said.
The central bank would improve its cross-cyclical policy adjustments, balancing short-term and long-term goals, economic growth and price stability, and enhancing the sustainability of supporting the real economy, it said.
The PBOC rolled over maturing medium-term policy loans while keeping the interest rate unchanged on Monday, as expected, but markets expect monetary easing may be inevitable in the coming months to support the economic recovery.
The central bank would monitor marginal changes of goods prices, guide and stabilise social expectations and keep prices basically stable, it said.
China’s consumer price inflation could pick up moderately in the second half of this year, and there was no basis for long-term deflation or inflation in the economy, the central bank said.
Source: Economy - investing.com
