The People’s Bank of China (PBoC) has already turned over 800 billion yuan ($119 billion) in profits to the central government since the beginning of the year, in a bid to sustain fiscal spending at a time when the world’s second-largest economy of the world faces strong downward pressures, according to Chinese state media.
The transfer is equivalent to the volume of liquidity released with a 0.4 percentage point cut in bank reserve requirements, the head of the state treasury office, Dong Huajie, said during a briefing on Monday (9), according to the state newspaper. China Securities Journal.
In March, the PBoC said it would transfer profits of more than 1 trillion yuan from its ample international reserves to the central government to help finance fiscal spending this year.
Previously, the Chinese Central Bank had said that the funds would be transferred in a balanced and monthly manner.
Dong commented that the amount transferred will exceed 1.1 trillion yuan, which could boost M2, the broadest measure of China’s monetary base, by 0.5 percentage point this year.
Source: CNN Brasil
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