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Home›World›The Buzz | China won’t hike rates soon as it exits stimulus, says state media

The Buzz | China won’t hike rates soon as it exits stimulus, says state media

By -
Friday, November 27, 2020
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China is very likely to exit from some of its stimulus measures as the economy improves, but there won’t be any interest rate hike soon, a leading state newspaper said on its front page yesterday.
“If previous rounds of withdrawing stimulus policies are a guide, ‘tight money’ and ‘tight credit’ are inevitable, and policy rate hikes are also normal,” the China Securities Journal said. “However, we shouldn’t see the monetary authority proactively raising the policy rate for some time to come.”
While the state newspaper didn’t attribute its view to any policy maker, citing mainly economists instead, a front-page story could be seen as an official signal of policy.
Chinese officials have been talking about gradually winding back stimulus since the summer, alongside evidence of a rebounding economy fueled by strong export growth and a coronavirus outbreak that’s now under control domestically. The People’s Bank of China remains on course to taper its emergency support even as a string of defaults by government-linked companies sent tremors through the credit markets recently.

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