China will use timely cuts to its bank reserve requirement ratio (RRR) along with other monetary policy tools to maintain reasonably ample liquidity, state media said on Wednesday, citing a cabinet meeting.
Hampered by Covid-19 restrictions and a sharp housing slowdown, China’s economy has struggled to recover, even after a flurry of measures this year to stimulate domestic demand.
Economic activity in the fourth quarter “is crucial for full-year growth,” according to the State Council meeting chaired by Prime Minister Li Keqiang on Tuesday, adding that now is a “critical moment” to consolidate a stable basis of the economy.
“We will use monetary policy tools, such as reserve requirements cuts, in a timely and appropriate manner to maintain reasonable and sufficient liquidity.”
China’s economy suffered a broad slowdown in October and a recent spike in Covid-19 cases deepened fears about its growth in the final quarter of 2022, amid a struggling real estate sector, high youth unemployment and extended restrictions under Beijing’s Covid-zero regime.
The People’s Bank of China generally takes the lead of the cabinet, which oversees the world’s second-largest economy and charts the fundamental course of China’s economic policies.
The central bank last cut the reserve requirement ratio — the amount of money banks must hold as reserves — by 25 basis points in April, as Shanghai’s commercial hub went into a citywide lockdown.
China will keep its economic operations within a reasonable range and strive for relatively good results, CCTV reported, adding that past fiscal and financial policies were paying off but still had great potential.
The cabinet also called for the stabilization and expansion of consumption and pledged to support the sound development of the platform economy.
To support the sluggish real estate market, China will push for the implementation of special loans for home delivery and encourage commercial banks to issue new loans, CCTV reported.
Source: CNN Brasil
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