PBOC adviser urges rate cuts at the Bank, and more fiscal support from government
Wants a more pro-active fiscal policy & People's Bank of China rate cuts
Sheng Songcheng is an adviser to the People's Bank of China , with the advice.
- China does not face the same deflationary pressures that exist overseas
- fiscal policy measures should be the first consideration
- monetary policy playing a supporting role
Sheng quoted in Yicai (a financial magazine in China), comes via rtrs Reuters
- Sheng said that policymakers should pursue fiscal solutions as a priority, including
- front-loading the issuance of local government bonds to support infrastructure projects
- continued cuts to taxes and fees
Background to this is last week's PBOC cut to the one-year MLF rate last week by five basis points, the first such cut since early 2016.
- PBOC has cut RRR seven times since early 2018