China’s central bank vows supportive monetary policy but dismisses dramatic easing measures
- PBOC governor Pan Gongsheng tells Lujiazui Forum that treasury bond purchases are in the works, clarifies these do not equate to Western quantitative easing
China’s central bank governor has pledged to continue accommodative monetary policies to jolt the economy, but he also doubled down on long-maintained intentions to avoid Western-style quantitative loosening.
“It should be noted that incorporating bond trading into the policy toolbox does not mean quantitative easing,” the governor said at the forum, which is regarded as an influential finance industry gathering and which represents Shanghai’s ambitions to become a global financial centre.
Pan said it should be viewed as a liquidity-management tool – one that will be utilised with others to foster a suitable liquidity environment.
“This process is gradual, since the pace of bond issuance, maturity structure and custody system need to be studied and optimised,” he explained.
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Pan’s comments came amid market discussions about whether stronger support is needed, and about whether the central bank’s expected bond purchase would equate to quantitative loosening.
The latest key economic metrics present a mixed picture of the economy after some policy-easing measures, like those for the property sector, appear to have fallen short of their intended effects.