China to Maintain 'Normal' Monetary Policy for as Long as Possible, PBOC Gov Says

BY Dow Jones & Company, Inc. | ECONOMIC | 09/28/21 06:06 AM EDT

China will continue its "normal" monetary policy for as long as possible and has no need to purchase assets like many western peers, said Yi Gang, governor of the People's Bank of China.

The Chinese economy's potential growth is expected at a range of 5% to 6%, which will provide conditions for the PBOC to implement normal monetary policy, Mr. Yi said in an article published Tuesday.

The remarks came as the economy faces increasing headwinds from a cooling property market, a power crunch and Covid-19 outbreaks. These headwinds have prompted investment banks and research houses to cut growth forecasts for China, while expecting Beijing to loosen policy to support growth.

Mr. Yi said in the article that interest rates of western economies have been declining, with rates in many countries at close to zero or negative levels.

He said central banks should be cautious in implementing asset purchases. If they have to do so, it is better to pare down the scope of the purchases and cut the duration of the asset purchase operations, he said.

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