Economy
China vows lower business financing costs, support for property sector in H2
© Reuters. A man walks past the headquarters of the People’s Bank of China (PBOC), the central bank, in Beijing November 20, 2013. China will lift controls on deposit rates when conditions are ripe, the central bank vice governor said on Wednesday, as part of effort
BEIJING (Reuters) – China will lower financing costs for firms, stabilise market expectations and support the property sector in coming months, the central bank said on Tuesday amid a flagging economic recovery.
The world’s No.2 economy staged a better-than-expected recovery in the first quarter following COVID reopening but has lost steam since the April-June quarter as demand waned both at home and abroad.
The People’s Bank of China’s (PBOC) statement followed a meeting at which officials from the bank and the State Administration of Foreign Exchange (SAFE) looked to the second half of the year.
As the property sector had failed to get out of the woods yet, the PBOC pledged it would support a “stable and healthy development” of the real estate market, including continuing to guide the reduction of personal housing loan interest rates and downpayment ratios, according to the statement.
The PBOC will also guide commercial banks to adjust rates on existing mortgages in a legal and orderly manner.
A private survey showed on Tuesday average new home prices in 100 Chinese cities fell for a third consecutive month in July.
China will also pay close attention to cross-border capital fluctuations, keep the yuan basically stable and step up support for firms to hedge exchange rate risks, the PBOC statement said.
To ease pressure on the yuan, Chinese currency regulators have in recent weeks asked some commercial banks to reduce or delay their dollar purchases, Reuters reported on Tuesday, citing two people with direct knowledge of the matter.
The country will also coordinate financial support on the settlement of local government debt risks and effectively fend off financial risks in key areas, the statement said.
Pan Gongsheng, the PBOC governor as well as the head of SAFE, spoke at the meeting.
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo
SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.
With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.
The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.
China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.
The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.
“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.
The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.
($1 = 7.1315 renminbi)
© Reuters. Russian Central Bank Governor Elvira Nabiullina attends a news conference in Moscow, Russia June 14, 2019. REUTERS/Shamil Zhumatov/File Photo
MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.
The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.
Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.
“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.
Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.
“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.
The bank will next convene to set its benchmark rate on Feb. 16.
The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.
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