China’s PBOC Plans to Strengthen Liquidity Management
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The People’s Bank of China said it will strengthen liquidity management and “normalize” monetary conditions, reinforcing forecasts for higher interest rates to combat the highest inflation rate in two years.
The nation will use quantitative and price tools to manage liquidity, Hu Xiaolian, a central bank deputy governor, said in a statement on the bank’s website yesterday. PBOC adviser Xia Bin said at a conference in Shanghai today that both higher rates and bank reserve ratios may be needed to control liquidity.