According to Reuters, Hong Kong In an effort to boost the
economy and lessen the effects of geopolitical uncertainty, China's central
bank chairman announced on Monday that the government will sustain a moderately
loose monetary policy to preserve plenty of liquidity.
The People's Bank of China's governor, Pan Gongsheng, stated
that the central bank will use a number of instruments, including interest
rates and the minimum reserve ratio, to provide market liquidity.
The statement demonstrates Beijing's determination to use
what may be its most aggressive monetary policies in an effort to boost the
second-largest economy in the world.
Without giving specifics, Pan stated at the Asia Financial Forum in Hong Kong
that the central bank will significantly boost the nation's foreign exchange
reserves in the field of asset allocation in Hong Kong.
According to the head of the PBOC, Beijing will also assist
the Hong Kong Monetary Authority in reviving the liquidity of the offshore yuan
market through a "swap fund" scheme.
At the moment, Hong Kong is able to exchange up to 800 billion yuan thanks to
the currency swap arrangement.
(This story has been updated to read 800 billion yuan in
paragraph 6 instead of $800 billion yuan.)
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