China’s central bank vows to support demand, price rebound. According to an anonymous senior central bank official, the Financial News, a publication of the People’s Bank of China (PBOC), would promote demand and support a slight price comeback on Wednesday. The official said the PBOC would coordinate fiscal and industrial policies, guide expectations, and carefully monitor financial policies.
The official added that it “will create an appropriate monetary and financial environment to promote effective demand in the real economy, support a moderate price recovery, and enhance economic vitality,” the official added.
The official said that as real sector borrowing rates declined, China’s firm credit growth matched the rebound.
New bank loans almost quadrupled from July’s level in August as the central bank moved to boost economic development despite lackluster domestic and international demand.
China has recently implemented interest rate reductions and other property softening measures to boost the economy, which has suffered since the outbreak.
China’s consumer prices rose in August as deflationary pressures eased and the economy stabilized.
Beijing officials have traditionally denied long-term deflation. “Reduction in mortgage rates will effectively reduce the interest burden on residents,” the official said.
Last week, five of China’s top state banks said they would decrease first-home mortgage interest rates to help the housing industry. The official said early mortgage repayments had been cut to enhance customer trust.
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