Left Menu
Development News Edition

UPDATE 1-China's c.bank vows more steps to support virus-hit economy

Reuters | Beijing | Updated: 22-02-2020 09:33 IST | Created: 22-02-2020 09:20 IST
UPDATE 1-China's c.bank vows more steps to support virus-hit economy
Image Credit: Wikimedia

China's central bank will take further steps to support the virus-hit economy, including releasing more liquidity and lowering funding costs for firms, a vice governor of the bank told state media.

The People's Bank of China (PBOC) will guide market interest rates lower and keep liquidity appropriately ample to help companies affected by the coronavirus epidemic, Liu Guoqiang, the bank official, told the Financial News in an interview. The PBOC will release more liquidity to banks by adjusting the criteria for targeted reserve requirement ratios (RRR) cuts, Liu said.

"China's monetary policy space is still very sufficient, and the toolbox is also sufficient. We are confident and able to offset the impact of the epidemic," Liu told the newspaper. The central bank will push down real lending rates, especially for small firms, by further improving the transmission mechanism of the loan prime rate (LPR) - its new benchmark lending rate, Liu said.

Liu reiterated that the central bank will not resort to a "flood-like" stimulus. China has cut several of its key rates in recent weeks, including the benchmark lending rate on Thursday, in a bid to reduce financial strains on companies facing severe business disruptions due to the outbreak. Investors widely expect further monetary and fiscal support measures in the coming weeks.

Benchmark deposit rates will also be adjusted at an appropriate time, Liu said. Liu said that the epidemic's impact on China's economy would be limited, and that Beijing would strive to meet economic and social development targets this year.

Chen Yulu, another vice central bank governor, said that the coronavirus' impact on China's economy will be short-term and limited and that the country is fully confident it beat the epidemic, state media reported on Saturday. "We believe that after this epidemic is over, pent-up demand for consumption and investment will be fully released, and China's economy will rebound swiftly," Chen said.

China's economic growth may show a sharp slowdown in the first quarter, probably dipping to 3% or even lower from 6% in the previous quarter - which was the weakest pace in nearly 30 years, economists estimated. The central bank also is closely monitoring consumer prices, which could be disturbed by the virus epidemic, Liu said.

Seasonal factors and the virus' impact were behind the flat M1 money supply, or cash in circulation plus corporate demand deposits, in January from a year earlier, Liu said. Liu also said China's economic fundamentals were sound, adding it had ample foreign currency reserves to support its yuan currency.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION / BLOG / INTERVIEW

Tourism post-COVID 19: Lessons learned, out-of-box strategies to ensure the revival

In the pre-COVID 19 period the tourism industry was seen with much hope throughout the world. However, the COVID 19 pandemic has completely paralysed the tourism industry and its dependent sectors. The tourism industry in the post-COVID 19 ...

Cybersecurity post-COVID 19: More internet means more threats, stay alert folks!

When supported by adequate digital awareness campaigns and more crackdowns on cybercrimes, increased internet usage will help more people embrace technology and better understand the risks, bringing us closer to unleashing the true potentia...

Rising temperatures in India seem to counter the spread of COVID 19 infections

Scary predictions on the rate of spread of COVID 19 infections in India are floating in media. But the data on the spread of infections coming so far point to a contrary trajectory putting a question mark on such predictions. Explanations o...

Sanitation post-COVID 19: Tissue paper not in fashion, learn to wash

Tissue paper has failed COVID 19 test. The modern understanding of sanitation is passing through a stage of transformation. Those who used to feel proud of using tissue paper have been compelled to wash frequently their hands with soap. In ...

Videos

Latest News

PM has given us weapon to break Coronavirus' chain: Bedi

Backing the Prime Ministersappeal to the countrymen to light lamps on April 5 to displaythe nations collective resolve to combat coronavirusoutbreak, Puducherry Lt Governor Kiran Bedi on Friday saidNarendra Modi has given us the weapon to b...

COVID-19: IIT alumni develop drone with infrared camera for thermal screening

Three alumni of the Indian Institute of Technology IIT have developed a drone equipped with infrared camera which can help in thermal screening of groups without human intervention and identify suspected COVID-19 cases at an early stage onc...

COVID-19 death toll in country rises to 56, cases to 2,301

The number of COVID-19 cases climbed to 2,301 in the country on Friday while the death toll rose to 56, according to the Union Health Ministry. The number of active COVID-19 cases stands at 2,088, while 156 people were either cured or disch...

No new COVID-19 case in Bhilwara in last 3 days

No COVID-19 case has been reported from Bhilwara, Rajasthan over the last three days, said District Collector, Rajendra Bhatt.In the last three days, the district has not witnessed any fresh cases of coronavirus. In order to break the chai...

Give Feedback