China’s central bank: economic development faces unprecedented challenges

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China’s central bank talks about extraordinary measures to support the economy and make monetary policy more flexible in order to tackle financial risks.

  • China’s economy shrank 6.8 percent in the first quarter, compared to a year ago

The Chinese central bank said on Sunday that it will strengthen extraordinary measures to support the economy and make monetary policy more flexible in order to tackle financial risks.

The People’s Bank of China monetary policy implementation report for the first quarter of the year did not repeat the usual long-standing central bank pledge to refrain from stimulating “Calcell” to support growth, reinforcing signs of further monetary policy measures.

The bank said the long-term economic stability trend in China remains unchanged, despite the outbreak of the Coronavirus.

“But for the time being, economic development in China is facing unprecedented challenges, and we should study carefully the difficulties, risks and uncertainties.”

The bank also indicated that it will maintain abundant liquidity using measures related to macro and structural policies and will continue to deepen interest rate reforms to contribute to reducing the cost of borrowing and allocating financial resources more effectively, adding that it will support the real economy, especially small and medium enterprises.

It is noteworthy that China’s economy shrank 6.8 percent in the first quarter compared to a year ago, for the first time since at least 1992, as the outbreak of the virus paralyzed production and spending and intensified pressure on the authorities to do more to stop job bleeding.





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