China to keep ‘normal’ monetary policy

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    BEIJING- China will maintain a “normal” monetary policy, a senior central bank official said on Tuesday, as Beijing holds off on more easing as its post-COVID economic recovery gathered pace.

    Sun Guofeng, head of the monetary policy department at the People’s Bank of China, told a press conference the central bank would not change its monetary policy direction or its flexible approach to policy.

    Liquidity would also stay reasonably ample, which would allow China’s economy to return to its potential growth, he said.

    “To cope with all sorts of uncertainties, the monetary policy requires greater certainty,” said Sun, adding that China has not adopted zero or negative interest rates and other non-traditional policies such as quantitative easing. That means the PBOC does not need to deal with the complications associated with exiting such measures.

    Chinese authorities have urged banks to offer cheaper loans and cut fees to help struggling businesses hit by the COVID-19 pandemic. Lenders have also grappled with a surge in non-performing loans and difficulties to replenish their capital as profits fell. — Reuters