Central Banks
China’s Central Bank Signals It Has Policy Space to Ease
- Current rates are ‘reasonable,’ provides room for action
- PBOC held rates last week, but economists expect cuts to come
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China’s current interest rates are “reasonable” and provide room for future policy action, the People’s Bank of China said, adding to expectations it may resume lowering rates in coming months.
Real interest rates in the country are “slightly lower” than the pace of potential economic growth, the central bank said in a statement posted late Tuesday on its verified WeChat account. Such a situation helps make debt sustainable and provides the government with “extra” policy scope, it said.