China News Service, March 21. The central bank's website published on the 21st the People's Bank of China Governor Yi Gang's speech at the China Development High-level Forum Roundtable.
Yi Gang pointed out that monetary policy needs to balance between supporting economic growth and preventing risks.
China's macro-leverage ratio has remained basically stable. While providing positive incentives for economic entities, it also restrains the growth and accumulation of financial risks.
Yi Gang introduced China's practice of implementing a prudent monetary policy and supporting the high-quality development of the real economy in recent years.
First, we have more room for monetary policy regulation.
China's monetary policy has always been maintained within a normal range, with adequate tools and means, and moderate interest rates.
We need to cherish and make good use of the normal monetary policy space, and maintain policy continuity, stability and sustainability.
The current broad money (M2) growth rate is about 10% year-on-year, which basically matches the nominal GDP growth rate. The 10-year Treasury bond yield is about 3.2%, and the open market 7-day reverse repurchase rate is 2.2%.
In 2020, the consumer price index (CPI) rose 2.5% year-on-year.
It can be seen from the above figures that China’s monetary policy is within a normal range, and there is room for providing liquidity and an appropriate level of interest rates.
Second, monetary policy should pay attention to both the total volume and the structure, and strengthen targeted support for key areas and weak links.
On the basis of maintaining an overall reasonable and sufficient liquidity, monetary policy can play a certain degree of directional support in key areas of the national economy, weak links, and social undertakings.
Since the new crown pneumonia epidemic, the People's Bank of China has implemented a number of measures to effectively help small and medium-sized enterprises maintain employment stability.
Third, monetary policy needs to balance between supporting economic growth and preventing risks.
China's macro-leverage ratio has remained basically stable. While providing positive incentives for economic entities, it also restrains the growth and accumulation of financial risks.
Fourth, monetary policy needs to create a suitable environment for deepening financial reform and opening up.
Generally speaking, at present, we must implement a sound monetary policy, support the stabilization of enterprises and ensure employment, continue to fight the battle to prevent and resolve major financial risks, and further deepen financial reform and opening up.