BEIJING (Reuters) – Monetary policy is less effective in stimulating China’s growth as its economy faces a significant increase in downward pressure, a senior central bank researcher said on Tuesday.
The People’s Bank of China (PBOC) has slashed banks’ reserve requirements four times this year, and financial markets are wondering if it is considering more aggressive steps such as a cut in its benchmark lending rate.
China had cut benchmark interest rates several times in the course of a year from late 2014. Rates have been kept steady since the last reduction in October 2015.
The downward pressure on China’s economy is caused partly by previous policy adjustments, Xu Zhong, head of the PBOC’s research bureau, said at a finance forum in Beijing.
China should improve its short-term demand management, Xu said, adding that it should strengthen policy coordination and avoid one-size-fits-all policies.
Reporting by Kevin Yao; Writing by Ryan Woo; Editing by Kim Coghill