Amid the US-China trade war, Central Banks around the world decreased their policy rates in order to encourage borrowing and provide a stimulus to the economy. The US Central Bank first took this monetary policy measure and the other central banks soon followed. However, China had said that it is in no hurry to provide a monetary stimulus and can handle the downward pressure on the economy without such measures.
Analysts were expecting the Chinese government to introduce monetary reforms in order to cater to the downward stress caused by the trade war. Major central banks around the world, including the European Central Bank had cut borrowing rates to stimulate the economy. However, the head of the People’s Bank of China Yi Gang has said that, “We are not in a rush to act as Central Banks of other countries.” Yi Gang said that the Chinese economy is still doing well and despite the slower growth, it was in no need for introducing such policies to stimulate growth.
Chinese growth rate stood at a 17-year low, but Yi Gang said that the growth rate was going according to plan. Earlier this month, the Bank of China had lowered the amount of capital that people could keep as reserves in the banks, which added around 126 billion in the Chinese Economy.
Beijing and Washington had conducted deputy-level trade talks in Washington last week and both sides were positive that they would come to some settlement in the upcoming high-level talks in October.