Reuters reports that the People’s Bank of China does not need to step up its policy easing as an economic recovery is well under way.
Further stimulus could stoke property and stock bubbles, central bank policy adviser Ma Jun said in remarks published on Wednesday.
Lead paragraphs
China’s economy could grow more than 4% in the third quarter and over 6% in the fourth quarter, bringing the 2020 growth to around 2%, Ma was quoted by Sina Finance as saying.
‘At present, the strength of counter-cyclical adjustment of monetary policy is not small. We should maintain the current strength, and there is no need to step up,”’Ma said.
‘If we boost stimulus, there could be some negative consequences, such as real estate and stock market bubbles.’
Market implications
The Chinese recovery has been a partial cause and effect for the strong reversal in equity markets and risk appetite.
A stronger-than-expected rebound in activity in the second quarter has reduced the urgency for the PBOC to ease policy further, but will keep conditions accommodative to support the recovery,
sources have told Reuters.
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