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China Reiterates Conservative Monetary Policy

The State Council, or China’s cabinet, on Friday reiterated that it will maintain a prudent monetary policy to support economic restructuring, warding off pressure from commercial lenders for a policy loosening amid current interbank liquidity squeeze.

Still, the State Council said in a guideline issued for the financial sector that the country will keep credit growth at a “reasonable level”.

The statement vowed to strike a balance between stabilizing economic growth, adjusting the economic structure, stemming consumer inflation and guarding against financial risks.

According to the guideline, the government will use quantitative and pricing monetary policy tools to increase the money velocity and ensure that funds are used more efficiently.

The central bank will also help financial institutions ensure that credit is available for the advanced manufacturing and information technology sectors, as well as labor-intensive industries, the guideline said.

via Xinhua [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza