China's central bank pledged to adjust its policy tools in a timely manner and to support panda bond issuance, following a weekend meeting that mapped out the second half of the year. The pledge comes after second-quarter growth slowed to its weakest pace in more than three years.
The People's Bank of China pledged to adjust its monetary policy tools in a timely manner and to facilitate panda bond issuance, according to a statement released Sunday. Governor Pan Gongsheng headed the work meeting on Saturday that set out policy priorities for the rest of the year.
PBOC Widens Financial Opening
According to the statement, the PBOC will continue an appropriately loose monetary policy and maintain ample liquidity. It also pledged to steadily open the financial market further, advance infrastructure cooperation, and enrich liquidity management and risk-hedging tools.
Beyond that, the central bank will keep financially supporting debt-risk resolution for local government financing vehicles and push their transition toward market-oriented operations. It also plans to help more overseas institutions issue yuan-denominated panda bonds, support Shanghai's cross-border finance and offshore services, and consolidate Hong Kong's position as an offshore yuan hub.
Slowdown Prompts Fiscal Push
The meeting followed a Politburo call on Thursday to accelerate fiscal spending on already-budgeted infrastructure projects for the remainder of the year. This comes after data released last month showed economic growth slowed to 4.3% in the second quarter, the weakest pace in more than three years and below the lower end of the government's 4.5% to 5% full-year target.
Xinhua reported that the Politburo, a top party decision-making body, acknowledged "difficulties and challenges facing the economy" at its meeting. A summary of the discussion showed China must accelerate the pace of fiscal expenditure and make monetary policy more flexible and forward-looking.
Source: Investing.com (Reuters)
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