PBoC keeps the neutral monetary stance – UOB

Suan Teck Kin, CFA, Head of Research at UOB Group, assessed the recent report from the PBoC.

Key Quotes

“PBoC continued to maintain its “neutral and prudent” policy stance while keeping the focus on managing and preventing systemic risks, monitoring liquidity conditions and ensuring an environment of stable growth, reform and restructuring”.

“The central bank highlighted M2 money supply growth should not be a focus, suggesting that interest rate as a tool may play greater prominence going forward”.

“Financial market reform is set to deepen further through its “twin pillar” of monetary policy and macroprudential policy, market orientation of interest and FX rates, liquidity management measures, use of lending policy, and other measures to support national priorities, including economic reform and restructuring and Belt & Road Initiative”.