Reuters. FILE PHOTO: A woman walks past the headquarters of the People’s Bank of China (PBOC), the central bank, in Beijing, China, September 28, 2018. REUTERS/Jason Lee/File Photo
SHANGHAI/BEIJING (Reuters) – China will promote a sustained economic recovery by focusing on boosting domestic demand while fending off financial risks, People’s Bank of China Governor Pan Gongsheng said in a statement on Saturday.
The central bank will make its policy more “precise and decisive” by urging financial institutions to lower real interest rates on loans and reduce financing costs for companies and individuals, Pan said in a report published on the bank’s website.
The report is important because it is the first time the governor has commented on policy after the release of macroeconomic data for the third quarter. It outlines the authorities’ short-term priorities and has been delivered to the country’s parliament.
You said that efforts will be made to activate capital markets and increase investor confidence.
He also announced “the implementation of macro policy adjustments in response to changes in the economic situation, effectively strengthening financial supervision, focusing on increasing domestic demand, building confidence and preventing risks, and promoting a sustainable economic recovery.”
China’s economy grew at a faster-than-expected pace in the third quarter, while consumption and industrial activity also surprised to the upside in September, suggesting that the recent round of policy actions is helping to underpin the initial economic recovery.
The country will maintain the stability of the yuan, prevent the risk of unusual fluctuations in cross-border fund flows and maintain stability in the foreign exchange market, Mr. said.
It will steadily pursue its yuan internationalization program, establish a risk warning and control system for foreign investment, and protect the country’s foreign exchange assets, he added.
It will also help financial institutions help address local government debt risks, including the debt risks of local government financiers, he said.
You also said in the report that China will resolve the bond default risk of large real estate enterprises by preventing the risk from spreading to stock, bond and currency markets and ensuring the stable operation of financial markets.
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