China will maintain “normal” monetary policy for as long as possible, according to the People’s Bank of China Governor Yi Gang.
Policy makers plan to encourage a “reasonable” increase in household savings and incomes, Yi wrote in an article published Saturday in the central bank’s biweekly magazine China Finance. The country will also make sure its liquidity stays somewhat ample, and will facilitate reasonable growth of money supply and social financing, while avoiding excess liquidity flooding the economy in order to reduce fluctuations, he said.
Most of the world’s major economies have rolled out fiscal and monetary measures to counter the effects of the coronavirus pandemic. Yi cautioned that excessive stimulus could lead to debt expansion and create asset bubbles that will increase longer-term systemic risks.
The governor also said financial institutions and their shareholders, local governments and regulators should take prime