Kitty Wang
China has announced it will loosen its monetary policy to boost the economy, in a move that echoes steps taken in 2009 in the wake of the financial crisis.
The People’s Bank of China, the country’s central bank, will use a slew of different policy tools to boost the money supply — a move often criticized as “printing money” — including government debt and changes to interest rates and the amount of reserves it requires banks to hold.
The ruling Chinese Communist Party’s Politburo announced the move on Tuesday following a top-level economic meeting on Monday, state news agency Xinhua reported.
“After more than 10 years, the monetary policy orientation has been changed to ‘moderately loose’ again … sending a positive signal that will effectively boost the confidence of all parties and help China’s economy recover and improve,” it quoted the meeting as saying.
It said “moderately loose” means a “reasonable money supply, low interest rates, and a relatively loose monetary and credit environment” to boost investment and consumption.
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