China's central bank signals stable policy as economy rebounds

The PBOC will adjust monetary policy at the appropriate time, Deputy Governor Liu Guoqiang said at the briefing

China’s central bank Governor Yi Gang signaled monetary policy will largely be stable this year, saying interest rates in the economy are appropriate, inflation will remain under control and the currency’s volatility wasn’t a concern.  

In a rare media briefing, Yi said in Beijing on Friday that real interest rates are at a relatively appropriate level. He hinted at supporting the economy in other ways, saying cuts to the reserve requirement ratio remain an effective way for the People’s Bank of China (PBOC) to provide long-term liquidity. Price stability is the basis of a stable currency, he added. The economy is showing signs of a rapid recovery from its Covid slump, with investors on watch for a shift in the central bank’s policy stance as growth accelerates. Economists have lowered their expectation for major easing steps after the PBOC recently gave an optimistic outlook for the economy.  

The PBOC will adjust monetary policy at the appropriate time, Deputy Governor Liu Guoqiang said at the same briefing. Inflation is expected to stay mild in 2023 and “the overall inflation pressure is manageable,” he added.