PBOC Falls Back on Trusty Rates Lever as New Tool Kit Not Enough
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China’s central bank tried out a range of new tools this year that failed to reduce financing costs or reverse an economic slowdown before finally opting to cut benchmark interest rates for the first time since July 2012.
Seeking to rein in debt expansion and to regulate the burgeoning shadow banking industry, policymakers had taken targeted steps to support demand while eschewing broad monetary easing. Premier Li Keqiang said in September that China now relies on strong reforms rather than strong stimulus to bolster the economy, according to the official Xinhua news agency.