The People’s Bank of China said it considers interest rate cuts as a last resort in stimulating the economy, given its relatively low existing level and rising financing costs overseas, Caixin reports.
Central bank researchers published a report urging China to take caution when contemplating lower interest rates in its monetary policy.
“China’s current interest rates are higher than those of developed countries but lower than those of developing countries and other BRICS nations,” the report said. China’s rates are “generally compatible with financial and economic development, or even low,” it added.
“Because China’s interest rates are at a relatively low level, along with concerns about stability of the yuan and foreign exchange reserves, (China) should avoid excessive monetary easing,” the researchers wrote.