SHANGHAI:
China will ease monetary policy and
boost liquidity in the financial system with a series of measures, state media
cited a central bank official as saying, in a bid to avoid a sharp economic
slowdown.
According
to the official Xinhua news agency, the unnamed official at the People's Bank
of China said it planned to "steadily" introduce the measures,
including cutting the amount of cash lenders must keep in reserve.
The
report, published late Wednesday, comes as the world's number two economy
eases, with data last week showing it grew at its slowest pace for almost three
years in the January-March quarter, while manufacturing stutters.
As well
as easing reserve requirements, the report said the central bank will also
boost liquidity through its open market operations -- referring to its sale or
purchase of securities, which influences the volume of money and credit in the
economy.
"The
central bank will continue to implement a prudent monetary policy...and
maintain a reasonable level of interbank liquidity to facilitate a stable and
relatively rapid development of the national economy," the official said.
China
will "fine-tune" its monetary policy to allow more growth in bank
lending, the official added, reiterating remarks by other officials about the
need to adjust money policy.
The
People's Bank of China has already cut bank reserve requirements twice since
December last year, as policymakers look to get money through to the small
businesses and the agricultural sector that play a crucial role in the economy.
Chinese
banks have already ramped up lending, issuing 1.01 trillion yuan (US$160.3
billion) in new loans in March, higher than the 710.7 billion yuan recorded in
February, official data showed last week.
The
central bank declined to comment on the report.
Investors
have been waiting for Beijing to announce measures to ease monetary policy for
several weeks as figures show manufacturing activity almost dormant, while in
February the country posted its biggest trade deficit in more than a decade.
Friday's
figures showing the economy grew just 8.1 per cent were well below the 8.9 per
cent recorded in the last quarter of 2011 and marked the fifth consecutive quarterly
slowdown.
-
AFP/wm
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