Economics
PBOC Set to Look Through Credit Pain as it Tapers Stimulus
- Central bank to withdraw some pandemic monetary support tools
- Regulators seen as encouraging market discipline via defaults
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China’s central bank remains on course to taper its emergency support even as a string of defaults by government-linked companies sends tremors through the credit markets.
Officials have been preparing investors about the possibility of withdrawing some of that stimulus as the economic recovery picks up pace. While a surge in market interest rates this week following the defaults appears to have complicated that plan, economists say it won’t push the People’s Bank of China off its policy course.