(Bloomberg) -- China’s central bank will step up the implementation of its prudent monetary policy to provide stronger economic support, Governor Yi Gang said.
The economy is facing “certain downward pressures” due to the pandemic and external factors even as domestic inflation is relatively low, Yi said in a meeting of G-20 central bank governors and finance ministers. The People’s Bank of China released a statement on his comments Saturday.
China’s economy grew 0.4% in the second quarter, the slowest pace since the country was first hit by the coronavirus outbreak two years ago. It faces fresh risks from a resurgence in Covid infections, making it harder for the government to meet its 5.5% growth target this year.
The PBOC has taken a cautious easing path this year as aggressive rate hikes by the Federal Reserve widen its monetary policy gap with the US and drive outflows. It kept the rate on its one-year policy loans unchanged at 2.85% on Friday while rolling over 100 billion yuan ($14.8 billion) of the maturing loans amid ample cash levels in the banking system.
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