BEIJING — China’s central bank on Monday called for more coordination between the country’s monetary policy, fiscal policy and other policies as Beijing seeks to fend off risks and maintain stable economic growth.
Some positive changes have occurred in the structural adjustments of the Chinese economy in the first quarter, but deep problems remain amid uncertainties, the People’s Bank of China (PBoC) said in a statement on its website following a quarterly meeting of its monetary policy committee.
The PBoC did not elaborate on what the structural adjustments have been.
The central bank reiterated its pledge to continue with a prudent monetary policy that is neither too loose or too tight, and ensure reasonably ample liquidity in the interbank market. It repeated that Beijing will not resort to “flood-like” stimulus.
Iris Pang, Greater China economist at ING, expects the tax cuts and additional infrastructure spending planned by the government to amount to 4 trillion yuan ($596.45 billion) this year.
“With a sizeable 4 trillion yuan fiscal stimulus this year and a monetary easing policy that has created 40% credit growth in the first quarter alone, we expect the Chinese economy to grow above the 6% lower boundary target set by the government,” said Pang in a note on Monday.
China will report the first-quarter economic growth pace on Wednesday.
A Reuters poll showed that growth likely cooled to the weakest pace in at least 27 years, but a flurry of measures to boost domestic demand may have put a floor under slowing activity in March.
To encourage more lending, the PBoC has already slashed banks’ reserve requirement ratio (RRR) five times over the past year and is widely expected to ease policy further in coming quarters to spur lending and reduce borrowing costs, especially for small and private firms vital for growth and job creation.
The central bank will seek a balance among currency exchange rate, interest rate and international balance of payment, the PBoC said, adding that it will steadily push forward interest rate reforms.
The yuan currency will be kept basically stable, it said. — Reuters