PBOC Vows Moderately Loose Policy, Ample Liquidity in Q2 Report

The People’s Bank of China on Friday released its second-quarter monetary policy report, pledging to maintain a "moderately loose" stance as it seeks to shore up a slowing economy. The central bank said it will make full use of money- and credit-policy tools to foster growth, while keeping liquidity “generous” and ensuring credit flows remain steady. The PBOC said it would manage interest and exchange rates "prudently" to preserve market stability, and will strengthen the transmission of policy moves through the banking system. As part of that effort, the central bank plans to reduce banks’ liability costs, reinforcing guidance that lenders keep financing growth at reasonable levels. Price stability remains a priority, with the report saying the bank will support consumer prices returning to “reasonable levels.” The PBOC added that it will bolster a “friendly financial environment” by refining rate policy enforcement and standing ready to curb excessive market swings.