At a news conference held recently, the people’s Bank of China announced that it would timely use various monetary policy tools such as RRR reduction to increase support for the real economy and reduce the financing costs of enterprises.

A worker works at a production workshop in Nanjing, East China’s Jiangsu province, March 25, 2022. [Photo/Xinhua]

The People’s Bank of China, the country’s central bank, said on Thursday it will use multiple monetary tools to step up support for the real economy and reduce corporate financing costs.

The people’s Bank of China announced on April 14 that it would use a variety of monetary policy tools to increase support for the real economy and reduce the financing costs of enterprises.

“The PBOC will punctually and flexibly use multiple monetary tools, improve the functioning of monetary policy on both the aggregate and structural fronts, and beef up support for the real economy,” said Ruan Jianhong, a spokeswoman for the central bank.

Central bank spokesman Ruan Jianhong said at a press conference on April 14 that the people’s Bank of China will make flexible use of a variety of monetary policy tools in due time, give better play to the dual functions of aggregate and structure, and increase support for the real economy.

With policy assistance, the country’s credit growth is expected to be steady and facilitate economic recovery, Ruan said, adding that China’s long-term economic fundamentals remain solid despite resurgent cases of COVID-19 and a rise in external uncertainties.

Ruan Jianhong said that with the support of the policy, it is expected that the credit supply will continue to maintain a stable growth trend in the future to support the economic recovery. She also pointed out that at present, the frequency of domestic epidemics has increased, and the external environment has become more complex, severe and uncertain, but the fundamentals of China’s long-term economic improvement will not change.

Ruan made the remarks at a news conference on Thursday after the State Council, China’s Cabinet, decided at an executive meeting on Wednesday to lower the reserve requirement ratio at an appropriate time.

The executive meeting of the State Council held on April 13 decided to reduce the deposit reserve ratio in due time.

The RRR refers to the proportion of money that lenders must hold as reserves. China last cut the RRR in December by 0.5 percentage point, sending the weighted average RRR to 8.4 percent.

The deposit reserve ratio refers to the ratio of the legal reserves that financial institutions must deposit with the central bank to their total deposits. The last time China reduced the deposit reserve ratio was in December last year (down 0.5 percentage points). After the reduction, the weighted average deposit reserve ratio of financial institutions was 8.4%.

Sun Guofeng, head of the PBOC’s monetary policy department, said the RRR cut will be part of the central bank’s stepped-up efforts to reduce financing costs in the real economy and strengthen financial assistance to sectors hit hard by COVID-19, such as small and micro enterprises and self-employed businesses.

Sun Guofeng, director of the Monetary Policy Department of the people’s Bank of China, said that in the next step, the people’s Bank of China will timely use monetary policy tools such as RRR reduction to further increase the impact of Finance on the real economy, especially the real economy