Maintain constant force and strengthen counter-periodic regulation

| gov.cn

The report on the implementation of China's Monetary Policy in the third quarter of 2019 emphasizes--

Maintain constant force and strengthen counter-periodic regulation

The report on the implementation of China's Monetary Policy for the third quarter of 2019 released by the people's Bank of China today stressed the need to implement a sound monetary policy in the next phase. We will continue to maintain firm strength, grasp the strength and rhythm of policies, strengthen counter-cyclical adjustment, strengthen structural adjustment, properly respond to the short-term downward pressure on the economy, and resolutely refrain from "flood irrigation." Maintain the growth rate of broad money M2 and social financing scale to match the growth rate of nominal GDP.

How to look at the current CPI, PPI data--

The overall balance between supply and demand, it is necessary to guard against the divergence of inflation expectations

The report points out that at present, China's economy is generally stable, total supply and demand are generally balanced, and there is no basis for sustained inflation or deflation. It is estimated that after entering the second half of 2020, the impact of tail warping factors on PPI will be less than 2019 and more stable, CPI will gradually fade under the impact of rising food prices, and the gap between the two is expected to narrow. However, with the increase of external uncertain and unstable factors, the downward pressure on China's economy continues to increase, and it is necessary to guard against the divergence of inflation expectations for some time to come.

How to look at the change in the size of the balance sheet of the Central Bank--

As a result of the policy effect, monetary conditions remain stable as a whole.

The report stresses that, given that the rate reduction is an operational tool with strong policy effects, the central bank will also reduce reverse repurchase and facilitate (MLF) in the medium term to ensure reasonable liquidity in the banking system. Banks may also reduce their liabilities to the central bank according to operational needs, and the size of the central bank's balance sheet will decline or shrink. As a result, the recent month-to-month contraction in the balance sheet of the people's Bank of China mainly occurred in the current month or the following month.

However, in the long run, the monetary policy operation of lowering the statutory reserve ratio relaxes the liquidity constraints of bank loans to create deposits, plays a hedging role in the context of credit contraction, and keeps the monetary conditions stable as a whole.

Market-oriented Reform and reorganization of contractor Bank--

Take over the trusteeship work is progressing smoothly, maximize the protection of customers' legitimate rights and interests

The report said that the contractor Bank's takeover of custody work is progressing smoothly, the first phase of the acquisition and transfer of large claims has been successfully completed, and the second phase of property verification has been basically completed. On this basis, The third stage of market-oriented reform and reorganization is being promoted.

The contractor bank operates normally and there are no mass incidents such as customer runs. On the whole, the decisive implementation of the takeover played a timely "hemostatic" role, stopped financial violations, and curbed the spread of risks. Disposing of contractor bank risks by way of acquisition and undertaking not only protects the legitimate rights and interests of customers to the maximum extent, but also breaks the rigid payment in accordance with the law, rectifies the radical behavior of some institutions, and then strengthens market discipline. It promotes the reasonable credit stratification of the financial market. (reporter Chen Guojing)

Maintain constant force and strengthen counter-periodic regulation

| gov.cn

The report on the implementation of China's Monetary Policy in the third quarter of 2019 emphasizes--

Maintain constant force and strengthen counter-periodic regulation

The report on the implementation of China's Monetary Policy for the third quarter of 2019 released by the people's Bank of China today stressed the need to implement a sound monetary policy in the next phase. We will continue to maintain firm strength, grasp the strength and rhythm of policies, strengthen counter-cyclical adjustment, strengthen structural adjustment, properly respond to the short-term downward pressure on the economy, and resolutely refrain from "flood irrigation." Maintain the growth rate of broad money M2 and social financing scale to match the growth rate of nominal GDP.

How to look at the current CPI, PPI data--

The overall balance between supply and demand, it is necessary to guard against the divergence of inflation expectations

The report points out that at present, China's economy is generally stable, total supply and demand are generally balanced, and there is no basis for sustained inflation or deflation. It is estimated that after entering the second half of 2020, the impact of tail warping factors on PPI will be less than 2019 and more stable, CPI will gradually fade under the impact of rising food prices, and the gap between the two is expected to narrow. However, with the increase of external uncertain and unstable factors, the downward pressure on China's economy continues to increase, and it is necessary to guard against the divergence of inflation expectations for some time to come.

How to look at the change in the size of the balance sheet of the Central Bank--

As a result of the policy effect, monetary conditions remain stable as a whole.

The report stresses that, given that the rate reduction is an operational tool with strong policy effects, the central bank will also reduce reverse repurchase and facilitate (MLF) in the medium term to ensure reasonable liquidity in the banking system. Banks may also reduce their liabilities to the central bank according to operational needs, and the size of the central bank's balance sheet will decline or shrink. As a result, the recent month-to-month contraction in the balance sheet of the people's Bank of China mainly occurred in the current month or the following month.

However, in the long run, the monetary policy operation of lowering the statutory reserve ratio relaxes the liquidity constraints of bank loans to create deposits, plays a hedging role in the context of credit contraction, and keeps the monetary conditions stable as a whole.

Market-oriented Reform and reorganization of contractor Bank--

Take over the trusteeship work is progressing smoothly, maximize the protection of customers' legitimate rights and interests

The report said that the contractor Bank's takeover of custody work is progressing smoothly, the first phase of the acquisition and transfer of large claims has been successfully completed, and the second phase of property verification has been basically completed. On this basis, The third stage of market-oriented reform and reorganization is being promoted.

The contractor bank operates normally and there are no mass incidents such as customer runs. On the whole, the decisive implementation of the takeover played a timely "hemostatic" role, stopped financial violations, and curbed the spread of risks. Disposing of contractor bank risks by way of acquisition and undertaking not only protects the legitimate rights and interests of customers to the maximum extent, but also breaks the rigid payment in accordance with the law, rectifies the radical behavior of some institutions, and then strengthens market discipline. It promotes the reasonable credit stratification of the financial market. (reporter Chen Guojing)