Chinese Central Bank Commits to No Irrigation-style Stimulus, Protecting the Pockets of Ordinary Citizens

84

The People’s Bank of China (PBOC) has signalled that it is unlikely to pursue any strenuous monetary expansion measures in the near-future, while stressing the need to keep inflation gains contained.

At a press conference held on 23 June, PBOC deputy-governor Chen Yulu (陈雨露) stressed the importance of “firmly controlling the sluice gates of money, refraining from flood-style irrigation, and effectively protecting the money bags of ordinary citizens.”

He also pointed to the need to “effectively employ the dual functions of quantitative and structural monetary policy adjustments and strengthen cross-cyclical adjustments in a forward looking manner.”

Chen touted PBOC’s efforts to maintain the stability of Chinese monetary policy over the past ten years, with broad M2 money supply growth increasing by 10.8% per annum, a rate which he said is “basically in line” with average nominal GDP growth.