China's Deputy Central Bank Governor signals further monetary easing measures

Xuan Changneng, deputy governor of the People's Bank of China (PBOC), has emphasised the ample room for manoeuvring within China's monetary policy.

He highlighted the potential for additional cuts to banks' reserve requirement ratio (RRR), echoing market expectations for further easing measures to bolster the country's economy.

China's economy commenced the year on a stable footing, providing a measure of relief to policymakers amidst ongoing challenges in the property sector.

The assurance of ample monetary policy flexibility comes as authorities strive to maintain confidence and stimulate growth amid persistent weaknesses in real estate.

"China's monetary policy has ample room and rich policy tool reserves, and there is still room for cutting the RRR," stated Xuan Changneng during the press briefing, indicating the potential for additional reductions following the 50-basis points cut in January.

Analysts foresee at least one more adjustment in the RRR this year as policymakers endeavour to stabilise economic conditions.

Xuan also noted that the reduction in deposit costs and shifts in monetary policies across major economies would support China's interest rate policy operations.

Additionally, he emphasised China's commitment to promoting effective investment and addressing excess capacity, with an anticipated nominal economic growth target of approximately 8% for 2024.

During the same press conference, Vice Finance Minister Liao Min affirmed that fiscal policy would play a pivotal role in achieving the 2024 growth target.

He assured that the country's government debt remains at an "appropriate level," highlighting the government's commitment to providing necessary support amidst economic objectives.

(With inputs from Reuters)