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China’s central will guide interest rates lower to aid virus-hit economy – state media

SHANGHAI/BEIJING — China will guide overall market interest rates lower and keep liquidity appropriately ample to help companies affected by the coronavirus epidemic, a senior central banker told state media.

Liu Guoqiang, deputy governor of the People’s Bank of China, also told the Financial News in an interview that the central bank will release more liquidity to banks by adjusting the criteria for targeted reserve requirement ratios (RRR) cuts.

China has cut several of its key rates in recent weeks, including the benchmark loan rate on Thursday, in a bid to reduce financial strains on companies facing severe business disruptions due to the outbreak. Investors widely expect further monetary and fiscal support measures in coming weeks.

Benchmark deposit rates will also be adjusted at an appropriate time, Liu said.

Liu said that the epidemic’s impact on China’s economy will be limited, and Beijing will strive to meet various economic and social development targets this year.

The central bank also is closely monitoring consumer prices, which could be disturbed by the virus epidemic, the newspaper cited Liu as saying.

Liu also said China’s economic fundamentals were sound, adding it had ample foreign currency reserves to support its yuan currency. (Reporting by Samuel Shen, Leng Cheng and Kevin Yao; Editing by Kim Coghill)