China's central bank, the People's Bank of China, issued a statement yesterday filled with the usual reassurances:
- pledged to enhance implementation of monetary policies to stimulate domestic demand and revitalize the economy
- acknowledging that the economy is suffering from subdued demand and downbeat sentiment
- will implement prudent monetary policy in a more precise manner
- pay more attention to counter-cyclical adjustments
- make efforts to expand domestic demand and boost confidence
- intends to increase the implementation strength of existing monetary policy tools and enrich the toolbox, including utilizing central bank policy rates to guide market rates and improving the efficiency of the monetary policy transmission mechanism
So far, so zzzzzzzz ..... But, the statement did add something new. For the first time the PBoC highlighted the need to monitor changes in long-term yields during the economic recovery.
Analyst commentary said the new focus suggests regulatory measures to curb idle capital circulation and guide market expectations, aiming to normalize the 10-year government bond yield fluctuations around the policy rate after its recent plunge.
Posting as a heads up.
Also ICYMI:
Pan Gongsheng is the People's Bank of China Governor
