BEIJING (Reuters) – China has room to further cut the reserve requirement ratio, with the average RRR now at 6.6%, a central bank official said on Saturday, according to state broadcaster CCTV.
China said this week it will raise the budget deficit, issue more debt and loosen monetary policy to maintain a stable economic growth rate.
The People’s Bank of China has steadily reduced interest rates and injected liquidity this year as the authorities have made efforts to hit a official economic growth target of around 5%.
Interest rates should be strengthened to facilitate transmission and guide the comprehensive social financing costs to a steady decline, PBOC research bureau director Wang Xin said in remarks about specific considerations for China’s next phase of monetary policy implementation.
“As the PBOC’s exploration of buying and selling government bonds in the secondary market becomes more mature, the central bank should in the future use a variety of monetary policy tools to provide sufficient medium and long-term liquidity and maintain adequate liquidity in the banking system,” Wang said at an economic conference.
(This story has been refiled to say cut, not cuts, in the headline and to remove extraneous words in paragraph 1)
(Reporting by Liz Lee and Beijing newsroom; Editing by William Mallard)
