Central Bank: There is still ample room for monetary policy to respond to unexpected challenges and changes
On September 20, the State Council Information Office held a regular briefing on State Council policies to interpret the economic situation and policies. Zou Lan, director of the Monetary Policy Department of the People's Bank of China, said that the monetary and credit policies have initially shown results, and there is still sufficient policy space for monetary policy to respond to unexpected challenges and changes.
Zou Lan said that since the beginning of this year, the People's Bank of China has fully implemented the decisions and deployments of the Party Central Committee and the State Council, adopted precise and powerful prudent monetary policies, increased countercyclical adjustments, effectively responded to domestic and foreign risks and challenges, and consolidated the positive economic recovery. At present, the monetary and credit policy has initially shown results, mainly reflected in the following aspects: First, economic and price stability. In August, industry, consumption and other indicators improved significantly compared with the previous month; prices bottomed out and rebounded, CPI turned from negative to positive year-on-year, and the decline in PPI continued to narrow. Second, the total amount of financing is sufficient. In August, loans increased year-on-year on a high base, M2 and social financing scales maintained rapid growth of around 10%, and the supply of financial resources continued to be effective. The third is to optimize the loan structure. At the end of August, inclusive small and micro loans and manufacturing medium and long-term loans increased by 24.4% and 39.5% respectively year-on-year, significantly faster than the growth rate of all loans, and the quality and efficiency of financial services have been improved. The fourth is interest rate and exchange rate balance. In August, the interest rates on newly issued corporate loans and personal housing loans were stable but declined, and the RMB generally appreciated against non-U.S. currencies. While prioritizing support for domestic development, the RMB maintained a stable value against foreign currencies.
Zou Lan said that monetary policy still has sufficient policy space to respond to unexpected challenges and changes. The People's Bank of China will continue to implement prudent monetary policies accurately and effectively, strengthen countercyclical adjustments and policy reserves, and support high-quality development with high-quality financial services. Comprehensively use a variety of policy tools to maintain reasonable and sufficient liquidity; give full play to the pillar role of state-owned banks to enhance the stability of credit growth. We will ensure the implementation of the "16 Financial Measures" and increase financial support for the transformation of urban villages, the construction of both leisure and emergency infrastructure, and the construction of affordable housing. Continue to implement existing structural tools and further implement the extension and extension of expired tools. We will guide the financing costs of the real economy to stabilize and decline, and encourage banks to actively adjust existing mortgage interest rates. Make good use of various regulatory reserve tools to regulate supply and demand in the foreign exchange market and resolutely prevent the risk of exchange rate overshooting. Guide financial institutions to actively and steadily support the resolution of local debt risks and establish a normalized financial debt monitoring mechanism for financing platforms.
