The head of China’s central bank has pledged to implement policies to support the slowing economy, promising assistance for small firms and sectors hit by Covid-19 outbreaks and resulting lockdown measures.
“China’s monetary policy is accommodative and is in a comfortable range. We also stand ready to support small and medium-sized enterprises with more instruments, if needed,” said Yi Gang, governor of the People’s Bank of China.
“So with that outlook, certainly we have accommodative monetary policy supporting our real economy throughout this year.” he added.
Yi also stressed the need to maintain price stability amid high global inflationary pressure.
The comments, which were made during a video speech to the annual Boao Forum for Asia, come as renewed outbreaks of Covid-19 have seen sweeping lockdowns in a number of major cities, disrupting supply lines and production across the China. A number of analysts have reduced their growth forecasts as a result of the disruption.
Many believe that more stimulus measures will be needed if the government is to achieve its 2022 growth target of around 5.5%.
With traditional methods such as interest rate cuts unlikely to have much impact in areas still under lockdown, the bank has to be creative in its response to the crisis, whilst also balancing against the potential for inflation and capital flight.
The economic fallout of Russia’s invasion of Ukraine has seen prices for commodities and food rise even further after already soaring in the year prior to the military action. Yi acknowledged the impact unfolding events have had, and the difficult path that lies ahead as economies around the world battle to deal with the impact.
“The international landscape is fraught with uncertainties,” Yi said.