China News Service, Beijing, October 21 (Reporter Wang Enbo) People’s Bank of China Governor Yi Gang said in Beijing on the 21st when talking about the trend of monetary policy, that it is necessary to grasp the balance between stable growth and risk prevention, “neither let the market be short of money. , And don’t let the money in the market overflow.” Keep the money supply basically matched with the growth rate of nominal GDP reflecting potential output.

　　Since 2020, the new crown epidemic has brought a serious impact on the global economy, and countries have actively responded to it and launched powerful macro hedging measures in a timely manner.

When attending the 2020 Financial Street Forum annual meeting, Yi Gang introduced that since the beginning of this year, the People's Bank of China has introduced considerable macro hedging measures by reducing the deposit reserve ratio, refinancing and rediscounting, and innovating monetary policy tools that directly reach the real economy.

On October 21, the opening ceremony and plenary meeting of the 2020 Financial Street Forum Annual Meeting was held in Beijing.

In his keynote speech at the plenary meeting, Yi Gang, the governor of the People’s Bank of China, said that when he talked about the direction of monetary policy, he must keep a balance between stable growth and risk prevention, and “neither let the market lack money nor allow the market money to overflow.” , Keeping the money supply basically matching the growth rate of nominal GDP reflecting potential output.

Photo by China News Agency reporter Zhang Xinglong

　　Specifically, since 2020, the People's Bank of China has lowered its RRR three times, and the weighted average deposit reserve ratio has dropped by about 1 percentage point. The lowering of the RRR has released 1.75 trillion yuan of liquidity (RMB, the same below).

Since 2018, the central bank has lowered its RRR 10 times, and the weighted average deposit reserve ratio has dropped by about 5.5 percentage points, releasing a total of 8.1 trillion yuan in liquidity.

　　In general, the above-mentioned sound monetary policy has achieved positive results, and the reasonable growth of monetary credit and social financing has strongly supported the steady recovery of the Chinese economy.

In the first three quarters, China's GDP grew by 0.7% year-on-year, turning from negative to positive.

　　Talking about the next trend of monetary policy, Yi Gang said that a prudent monetary policy should be more flexible, moderate, and precise.

Implement normal monetary policy for as long as possible, maintain a normal and upward-sloping yield curve, and provide positive incentives for economic entities, which is generally conducive to the sustainable development of the economy and society, is conducive to the global competitiveness of RMB assets, and helps China Make good use of two markets and two resources.

　　He also pointed out that during the special period of this year's fight against the epidemic, China's macro-leverage ratio has increased. After the GDP growth rate rebounds next year, the macro-leverage ratio will be more stable.

Monetary policy needs to control the total gate of the money supply and appropriately smooth the fluctuation of the macro leverage ratio so that it can be maintained on a reasonable track in the long run.

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