Leaked minutes from a meeting held by the People’s Bank of China show policymakers are chiefly concerned with maintaining the stability of the yuan’s exchange rate in the run-up to an annual liquidity crunch ahead of the Lunar New Year holiday, The Wall Street Journal reported. Zhang Xiaohui, an assistant governor at the bank, said that cutting banks’ reserve requirement ratio to boost liquidity would send “too strong an easing signal,” potentially adding downward pressure on China’s currency. By instead injecting liquidity through short- and medium-term loan facilities, the central bank can take the money loaned out back when the loans expire.
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved