Chinese central bank to maintain prudent policy


China’s central bank said on Saturday that it will maintain prudent monetary policy to prevent inflation from spreading. In a third-quarter policy report released on Saturday, the People’s Bank of China (PBOC) also said it will look to significantly lower real interest rates through reforms.
It said the weighted average lending rate fell 4 basis points in third quarter to 5.62%. It also said it is looking at plans to switch the benchmark rate for existing loans to the new loan prime rate (LPR) that was launched in August.
China has no conditions for continuous inflation or deflation as the government’s macro policies are taking effect, the country’s central bank said Saturday. The domestic economy is facing downward pressure, and its endogenous growth momentum should be further enhanced, the People’s Bank of China (PBOC) said in its latest quarterly policy report.
The central bank will step up counter-cyclical adjustments while staying away from using a deluge of stimulus policies, the report said. The PBOC said efforts should be enhanced to prevent the spread of the expectations for inflation. China’s consumer price index, a main gauge of inflation, rose 3.8 percent year on year in October, while the producer price index, which measures costs for goods at the factory gate, dropped 1.6 percent year on year last month.— VoM

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