Speaking at a finance forum held in Shanghai via video on Thursday, Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission (CBIRC), dismissed odds of a massive stimulus and negative interest rates to boost the economic recovery from the coronavirus impact.
Key quotes
“Major economies should actively consider the external impact of their own policies in a highly-integrated global economy.”
“Major economies must consider how to exit massive easing.”
“There’s no free meal in this world…and you must pay a price for your blank cheques,” citing lessons from the previous crisis.
“When you introduce a large-scale stimulus, everyone is cheering. It may be very painful at the time of exit.”
“A dollar-denominated global monetary system had played a role in stabilizing the global economy, but massive domestic stimulus in the United States risks denting sovereign debt and dollar credibility.”
These comments come after the Chinese central bank Governor Yi Gang pledged to provide amply liquidity in the financial markets while the PBOC cut the 14-day reverse repo rate earlier in the Asian session.
- PBOC cuts its 14-day reverse repo rate to 2.35% vs. 2.55% previous
Share
