Prudent policy stance to offset headwinds

PBOC will refrain from zero interest rate or quantitative easing, says governor

China will not resort to competitive measures like zero interest rate or quantitative easing, but would instead maintain its conventional monetary policies over the long term and ensure currency stability, a top monetary official said.

Yi Gang, governor of the People's Bank of China, the central bank, said in an article in Qiu Shi, the Communist Party's flagship magazine, that the nation's prudent monetary policy, which is neither too tight nor too loose, "will help maintain the monetary conditions matching the requirements of potential output and price stability, along with countercyclical adjustments, to maintain reasonable and ample liquidity."

Policy observers speculated that Yi's article, which was published on Sunday, might indicate the basic policy tone for the Central Economic Work Conference, a top-level policymaking meeting to be held later this month. That meeting will discuss the major macroeconomic targets for next year.