| China's central bank to stick to moderately easy money policy |
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| Friday,April 24,2009 Posted: 16:34 BJT(0834 GMT) |
| From:Xinhua Article type:Reproduced |
BEIJING, April 22 (Xinhua) -- A senior Chinese central bank official said Wednesday the bank would continue to implement the moderately easy monetary policy to promote steady and fast economic growth.
Economic signs in China are "better than expected" because of the country's proactive fiscal policy, moderately easy monetary policy and stimulus plans, Yi Gang, vice governor of the People's Bank of China (PBOC), told Xinhua in an exclusive interview Wednesday.
He said the Chinese financial market was stable and sound and industrial output was increasing.
"Liquidity of the country's lenders is more sufficient than overseas banks," he said, noting the bank had reduced the required reserve ratio, cut interest rates and encouraged lenders to extend more loans.
As of March, M2 -- a broad measure of money supply, which covers cash in circulation and all deposits -- grew 25.5 percent from a year earlier to 53.06 trillion yuan (about 7.8 trillion U.S. dollars), the highest since 1996.
Narrow money supply, M1 -- cash in circulation plus corporate current deposits -- was up 17.04 percent to 17.65 trillion yuan.
Yi said the bank would stick to a moderately easy monetary policy in a bid to ensure sound and healthy development of the economy.
Yi said the bank would guide financial institutions to properly increase loans and optimize credit structure, channeling more loans to small and mid-sized companies, programs to increase employment and post-disaster reconstruction.
However, he said, loans to energy-intensive or polluting enterprises should be strictly controlled.
China shifted from a tight monetary policy to a moderately easy stance last year to prop up growth that had been undermined by declining exports and a slumping real estate sector
The benchmark deposit and loan interest rates have been reduced five times since September. The latest cut was in December, when the PBOC slashed the one-year benchmark interest rate for loans by216 basis points to 5.31 percent and that for deposits by 189 bps to 2.25 percent.
Added to the monetary policy was the 4 trillion-yuan stimulus package, including plans for 10 industries.
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