PBOC reportedly to pause easing as the economy recovers, wary of over-stimulus

Author: Justin Low | Category: Central Banks

Reuters reports, citing four policy sources on the matter

PBOC
The report says that the PBOC does not see an immediate need to ease monetary policy further, but will continue to keep conditions more accommodative to spur the domestic economic recovery.

The Chinese central bank is said to want to avoid the side effects caused by excessive stimulus measures, such as a surge in debt levels as well as the risk of asset bubbles.

That makes sense considering that China has kept the health crisis under control, though precautionary measures are still largely in place and international tourism is still something that they can't do much about at this stage.

In that lieu, policymakers and lawmakers are probably viewing the situation as "the worst being over" but the right amount of accommodative policy needs to be in place to maintain the recovery since a return to pre-virus conditions are still a long way to go.

If anything else, just something to take note as this may have more of an impact on Chinese equities should the narrative gain wider airing down the road.
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