China’s Central Bank Easing Measures to Aid Slow Economic Growth

According to economists at Citigroup Inc., Nomura Holdings Inc. and Goldman Sachs Group Inc. in China’s latest quarterly monetary policy report published last Friday, it was seen that the People’s Bank of China removed a few key phrases cited in previous reports, including sticking with “normal monetary policy.” That suggests a shift in attitude toward to a more supportive monetary policy.


According to Macquarie Group Ltd.’s Larry Hu, the report also dropped the phrase to “control the valve on money supply,” which suggests a step-up of monetary easing.



Goldman Sachs’ Hui Shan and colleagues said policy interest rates would likely remain unchanged, while Nomura’s Lu Ting said the chance of a reduction in the reserve requirement ratio will rise in coming months, as seen in Bloomberg reports.

Lu said, “We expect Beijing to soon significantly step up its monetary easing and fiscal stimulus to counteract the increasing downward pressure,”

Liu Shijin, who sits on the central bank’s monetary policy committee, said in an online forum Sunday that the economy could enter a period of “quasi-stagflation,” which needs close attention if it happens, Bloomberg added.

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