Li says no change in prudent monetary policy

Reuters
China has not and will not alter its prudent monetary policy, and will not resort to a "flood-like" stimulus, Premier Li Keqiang said on Wednesday.
Reuters

China has not and will not alter its prudent monetary policy, and will not resort to a “flood-like” stimulus, Premier Li Keqiang said on Wednesday.

“I reiterate that the prudent monetary policy has not changed and will not change,” Li said. “We are determined not to engage in ‘flood-like’ stimulus.”

A central bank official later reiterated Li’s comments.

The official said the central bank will prevent risks from overly tight monetary conditions, as well as promote reasonable growth in credit and social financing.

China has been rolling out measures, such as cutting banks’ reserve requirement ratio to ensure that there is ample liquidity in the financial system.

Li added that rising bill financing and short-term loans could lead to “arbitrage” activities and create potential risks.

Financial institutions should offer more credit, especially medium and long-term loans to small firms, he said.

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