China Has Lots of Policy Room if Trade War Worsens, PBOC Chief Says
China has “tremendous” room to adjust monetary policy if the trade war with the U.S. deepens, People’s Bank of China Governor Yi Gang said.
“We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous,” said Yi in an exclusive interview in Beijing.
Asked if his scheduled bilateral meeting with U.S. Treasury Secretary Steven Mnuchin this weekend would get negotiations with the U.S. back on track, Yi said it would probably be a “productive talk, as always,” though the topic of the trade war would be “uncertain and difficult.” The two will meet at on the sidelines of the Group of 20 gathering of finance ministers and central bank governors in Japan.
That meeting takes place as the two nations escalate their trade war amid a darkening outlook for the global economy, with Citigroup Inc. and Morgan Stanley warning this week that it risks tipping the world into recession. This is the first publicly announced meeting since the trade talks fell apart last month and could pave the way for a meeting between Presidents Donald Trump and Xi Jinping, who will likely be in Japan at the end of the month for the G-20 leaders’ summit.
Read more: https://www.bloomberg.com/news/articles/2019-06-07/china-has-lots-of-policy-room-if-trade-war-worsens-yi-gang-says?srnd=premium
