Weekend – People’s Bank of China pledged more stimulus to boost consumption

In a statement on Saturday China’s central bank, the People’s Bank of China (PBOC), announced plans to enhance financial support for technology innovation and consumption stimulation to boost economic growth.

The bank also hinted at using new tools to provide liquidity to the stock market and reaffirmed its commitment to lower interest rates and the reserve requirement ratio for banks when appropriate.

• PBOC aims to sustain growth through measures including liquidity provision and institutional safeguards for the capital market.
• Despite signs of recovery following stimulus measures introduced since September, growth remains under pressure due to risks like a potential US-China trade war.
• The State Administration of Foreign Exchange (SAFE) announced plans to encourage high-quality foreign investment in China’s technology sector. SAFE will improve the management of overseas-traded Chinese companies’ funds and refine regulations for multinational corporations’ capital management.

On Friday we had other statements from the Bank along similar lines:

• ForexLive Asia-Pacific FX news wrap: PBoC and NDRC with China-supportive comments

USD/CNH update, the yuan remains under pressure from a super-strong USD, but there is a but:

• yuan has hit its highest since mid-October 2022 (using its trade-weighted value)

This article was written by Eamonn Sheridan at www.forexlive.com.