Chinese central bank Governor Zhou Xiaochuan said the nation will maintain market stability and adjust policies at the right time, his first comments since a record cash squeeze hit the world’s second-largest economy.
China’s growth slowdown remains in a “reasonable” range and the economy is stable, Zhou, head of the People’s Bank of China, said today in a speech at the annual Lujiazui Forum financial conference in Shanghai. The nation will continue to implement a prudent monetary policy, which has shown to be appropriate with good results, Zhou said.
Chinese stocks rose as Zhou said he’s fully confident in the nation’s economic prospects and financial system. He reiterated points in the central bank’s June 25 statement that it will use tools to safeguard stability in money markets, after China’s overnight repurchase rate surged to a record high last week.
The PBOC “will use all kinds of tools to appropriately adjust liquidity in the market and maintain the overall stability of the market,” Zhou said in his first public remarks since the liquidity squeeze that sent money-market rates to the highest in at least 10 years.
He made the points on the economy and markets at the end of a 30-minute speech devoted mostly to discussing how Shanghai can develop into a global financial center.
The Shanghai Composite Index (SHCOMP) rose 1.9 percent as of 10:40 a.m. local time, headed for the first increase since June 18.
The credit crunch, aimed at wringing speculative lending out of the banking system, has increased chances that the government will miss its annual target for economic growth this year, according to Goldman Sachs Group Inc.
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