PBOC’s Liu: Should consider CPI and other factors before adjusting benchmark deposit rate

Dhwani Mehta FXStreet

Following a press conference on Friday, People's Bank of China (PBOC) Vice Governor Liu Guoqiang said that the central bank should consider CPI and other factors before adjusting the benchmark deposit rate.

Further comments

Need to consider further before changing deposit rate - need a complete evaluation before changing.

Deposit rate is a tool, need to be balanced in its use.

China has ample policy tools to cope with impact from coronavirus outbreak.

Won't allow credit crunch or flood of credit

Must ensure M2, loans grow slightly faster than nominal GDP.

Virus shock to china's economy is temporary.

China eco performance in march to be better than February.

Virus effects haven't exceeded 2008 crisis yet.

Can't say how large effect of virus will be on global economy.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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