Wang Yimingmember of the monetary policy committee of the People’s Bank of China (PBoC), asks the government to enact stronger policy measures to stimulate growth above 5% in the second quarteraccording to Bloomberg.
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“Reaching that benchmark in the April-June period is critical if China is to meet the government’s gross domestic product growth target of around 5.5% for all of 2022.”
“The economy faces new challenges, including the ongoing war in Ukraine and risks of rising imported inflation, as well as the Federal Reserve’s aggressive interest rate hike plan.”
“Covid outbreaks in China have also hit domestic demand and disrupted production and supply chains.”
“Government should make Covid checks more flexible to ensure logistics are smooth and also strike a balance between relaxing the restrictions too much or imposing excessively strict restrictions.”
market reaction
The USD/CNY is extending its ascent, now sitting at yearly highs of 6.5414, 0.60% more on the day. China’s worsening economic growth outlook and fears that strict covid lockdown measures will spread to Beijing are weighing heavily on the national currency.
The Chinese yuan posted its worst week since 2015 after witnessing a sharp depreciation on Friday amid a widening US-China yield gap and growth concerns.
Source: Fx Street
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