The governor of the Popular Bank of China (PBOC), Pan Gongsheng, said Thursday: “There are no winners in commercial wars and tariff wars.”
Additional quotes
- Unilateralism and protectionism have no way out and are not in anyone’s interest.
- China will adhere to the opening.
- China firmly supports free trade rules and multilateral trade system.
- China will promote inclusive economic globalization, maintaining global economic and financial stability.
Market reaction
At the time of writing, the AUD/USD is maintained in low field about 0.6350, lowering 0.15% in the day.
PBOC FAQS
The main monetary policy objectives of the Popular Bank of China (PBOC) are safeguarding price stability, including exchange rate stability, and promoting economic growth. The Central Bank of China also aims to implement financial reforms, such as the opening and development of the financial market.
The PBOC is owned by the State of the Popular Republic of China (RPC), so it is not considered an autonomous institution. The secretary of the Chinese Communist Party Committee (PCCH), nominated by the President of the State Council, has a key influence on the management and direction of the PBOC, not the governor. However, Mr. Pan Gongsheng currently occupies both positions.
Unlike Western economies, PBOC uses a broader set of monetary policy instruments to achieve its objectives. The main tools include an inverse repurchase rate to seven days (RRR), the installation of medium -term loans (MLF), interventions in the currency market and the reservations requirement rate (RRR). However, the preferential interest rate of loans (LPR) is China’s reference interest rate. The changes in the LPR directly influence the rates that must be paid in the market for loans and mortgages and in the interest paid on the savings. When changing the LPR, the Central Bank of China can also influence the exchange rates of Chinese Renminbi.
Yes, China has 19 private banks, a small fraction of the financial system. The largest private banks are Digital Webank and Mybank lenders, who are backed by technological giants such as Tencent and Ant Group, according to The Straits Times. In 2014, China allowed national lenders completely capitalized by private funds to operate in the financial sector dominated by the State.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
