China’s central bank governor, Pan Gongsheng, announced on Thursday that the People’s Bank of China (PBOC) is prepared to cut reserve requirement ratios (RRRs) and interest rates when appropriate this year. Speaking at a press conference during the third session of the 14th National People’s Congress, Pan emphasized that any adjustments will align with both domestic and international economic conditions and financial market performances.
Currently, the average RRR for China’s financial institutions stands at 6.6 percent, leaving room for potential reductions. Pan indicated that there’s also scope to lower the rates of funds provided to commercial banks through structural monetary policy instruments.
To maintain ample market liquidity and reduce banks’ liability costs, the PBOC plans to utilize a variety of monetary policy tools. These include open market operations, medium-term lending facilities, re-lending and rediscounts, as well as policy rates. The aim is to further drive down the overall costs of social financing.
Additionally, the central bank is exploring new structural monetary policy instruments to support investment and financing in scientific and technological innovation. Efforts will also focus on boosting consumption and stabilizing foreign trade.
Pan’s remarks signal the PBOC’s commitment to proactive monetary measures aimed at sustaining economic growth amid a complex global financial landscape.
