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2022.02.12 17:42 GMT+8

China's central bank to keep liquidity ample

Updated 2022.02.12 17:42 GMT+8
CGTN

A bank teller counts yuan at a bank in northwest China's Shanxi Province, August 6, 2020. /CFP

China's central bank on Friday said it would keep liquidity reasonably ample and step up financing support for key sectors. 

The People's Bank of China (PBOC) will meet the reasonable financing demands of the real economy while not resorting to flood-like stimulus, it said in its fourth-quarter implementation report. 

China's new yuan-denominated loans totaled 19.95 trillion yuan ($3.13 trillion) in 2021, up 315 billion yuan compared to the year before.

The world's second-largest economy has shown signs of slowing after a rapid rebound from the COVID-19 slump. To counter the slowing economic growth, China cut its reserve requirement ratio by 50 bps in December. The cut, the second such move of the year, would release 1.2 trillion yuan in long-term liquidity, said the PBOC at the time. 

"We believe that structural monetary policy tools will continue to play an important role, which means that 2022 should see record usage of various re-lending facilities," Zhang Jingjing, chief analyst at Western Securities, wrote in a note. 

The PBOC said it would keep the growth of money supply and total social financing basically in line with nominal economic growth. 

The weighted-average lending rate was at 4.76 percent in December, down 27 basis points from a year earlier, the central bank said. 

The central bank will also fend off systemic financial risks and will not use real estate as a short-term method of stimulating the economy, it said. 

(With input from agencies)

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