Monday, August 2, 2021
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China shifts to spar lending as inflation concerns ease – News


Hong Kong — China announced on Friday that it would release more liquidity to the financial system as inflation concerns showed signs of decline. Recovery is slow Faster than expected.

China’s central bank announced on Friday that it would reduce the amount of money banks had to secure and effectively release $ 154 billion (1 trillion yuan) for banks to lend. The decision by the People’s Bank of China to reduce the reserve requirement ratio by 0.5 points is not surprising, but the first such action since April last year when Beijing made similar moves near the peak of the Covid-19 pandemic’s impact. Shows about the economy.

New liquidity suggested by China’s central bank indicates that Beijing may be pivoting to support the economy after a sharp drop in credit earlier this year. The pivot to mitigation, though limited, puts China at a different wavelength than the Federal Reserve and the central banks of other developed economies. These advanced economies are beginning to discuss shrinking easing policies amid rising inflationary pressures.

Banks did not explicitly require loans to SMEs, but the central bank said Friday that it had significantly eased reserve requirements to support SMEs in China. Domestic consumption remains sluggish.

The State Council, the Chinese cabinet, emphasized that policy makers should avoid “flood-like” stimuli, but cited the negative impact of rising raw material prices on SMEs and cut reserves on Wednesday. I signaled.

China shifts to spar lending as inflation concerns ease

Source link China shifts to spar lending as inflation concerns ease

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