On Thursday, Zou Lan, head of monetary policy at the People’s Bank of China (PBOC), reaffirmed the central bank’s commitment to implementing a prudent monetary policy. According to Lan, the PBOC will continue to focus on supporting the real economy, which still needs time to recover from the effects of the Covid-19 pandemic.
Lan’s statement highlights the need to maintain the trend of economic recovery despite the “scarring effect” of the pandemic. The central bank aims to consolidate financial backing for the real economy, as demand has not yet fully recovered. It is essential for the central bank to lend support to the actual economy so that it can overcome the challenges caused by the Covid-19 crisis.
Additionally, Lan mentioned that China’s inflation rate is expected to pick up later this year, although he sees no basis for long-term deflation or inflation in the country. The PBOC will closely monitor the development of the property market and work to stabilize property financing. The central bank understands the importance of supporting the real estate sector so as not to create further economic instability.
Regarding the Chinese yuan, Lan noted that the impact on the currency from volatility in major currencies has been limited. The PBOC expects the yuan to be stable with two-way swings.
At the time of writing, the AUD/USD is consolidating its rebound at around 0.6720, up 0.10% on the day. This news indicates that the global economic recovery is on track, as more central banks show commitment to maintaining stability.
In conclusion, the recent statement by the head of monetary policy at the PBOC supports the bank’s dedication to implementing prudent monetary policy. This affirmation demonstrates the central bank’s commitment to consolidating support for the real economy and helping it recover from the effects of the pandemic. It also shows the bank’s intentions to stabilize the property market and keep inflation in check.
