MarketDeal24.Com – In an act of reassuring the market, Liu Guoqiang, a vice governor of People’s Bank of China (PBC) has said that, China has ample policy tools to support the country’s fledging economy after it was badly hit by the ongoing coronavirus crisis.
Policy makers from China have hinted that additional monetary and fiscal stimulus is required to support the economy which was already in disarray due to a prolonged trade war with the United States and the recent outbreak of COVID-19 has made the situation worst.
“The economy of China will keep on demonstrating extreme resilience,” Liu remarked at a briefing.
“In addition, we have plenty of policy tools and enough policy space to ensure that the economy is on growth trajectory. I think the impact of the pandemic on Chinese economy is temporary,” he said.
He also said that, “the Q1 data of Chinese economic activity will not look as soothing as was expected before, but the negative fall out from the pandemic is a short-term thing,” referring to some gains in the monthly data for March.
On a note of caution, Liu added that slashing the benchmark interest rate to push the lending costs lower requires careful analysis given elevated consumer inflation situation, currently running at 5.3%.