A Prudent Monetary Policy to be Maintained to Keep Credit Growth Stable
The People’s Bank of China is continuing to maintain a prudent monetary policy for 2015, to keep credit growth stable while having their hands free to fine tune policy is necessary. But the central bank said that it will speed up the pace of the market-oriented interest rate reform and will push forward the increase in yuan convertibility in the capital account.
The bank is also taking steps in preventing systemic risks in the financial sector a move that regulators will maintain pressure on a off balance sheet lending and shadow banking. Plus the country is creating a series of moves that will clamp down on shadow banking including tighter regulations in the usage of the bond market and interbanking assets for refinancing.
The move only reiterates the bank’s commitment to further stabilize monetary policy and even when the speculations mounts on the government to take necessary steps to boost the growth and fend off any deflationary pressures particularly in the loosening of the monetary policy in cutting the reserve requirement ratio for banks.