Coronavirus update: China’s central bank vows more steps to support national economy

Coronavirus update: China’s central bank will take further steps to support the virus-hit economy, including releasing more liquidity and lowering funding costs for firms, a vice governor of the bank told state media. The People`s Bank of China (PBOC) will guide market interest rates lower and keep liquidity appropriately ample to help companies affected by the coronavirus epidemic, Liu Guoqiang, the bank official, told the Financial News in an interview.

The PBOC will release more liquidity to banks by adjusting the criteria for targeted reserve requirement ratios (RRR) cuts, Liu said.

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“China`s monetary policy space is still very sufficient, and the toolbox is also sufficient. We are confident and able to offset the impact of the epidemic,” Liu told the newspaper.

The central bank will push down real lending rates, especially for small firms, by further improving the transmission mechanism of the loan

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Cheap crude to be a new normal, oil income-dependent economies will have to diversify: IMF’s chief economist Gita Gopinath

As the global oil markets remain under intense pressure, it seems like there is no quick recovery for the global crude prices from the historical fall witnessed recently. Global crude prices are likely to remain subdued for some time, as predicted by the International Monetary Fund. The global crude prices recently witnessed a historic fall with crude futures trading in negative for the first time. 

“We can say for sure that this uncertainty and volatility around oil prices will continue for the next several months. IMF’s forecast for oil prices is around $35 per barrel for 2020-2021 but just as a pandemic is so uncertain, the recovery will also depend on a lot of factors. Even if the prices recover, no one is expecting crude prices which were there before the virus”, said IMF’s chief economist Gita Gopinath in an exclusive interaction with WION.

Historically low oil prices also translate

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Fed Chief Jerome Powell says US economy facing heightened uncertainty

Federal Reserve Chairman Jerome Powell says the outlook for the US economy is “extraordinarily uncertain” and the success of the recovery effort will depend in large part on the country’s ability to contain the spread of the coronavirus.

“A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities,” Powell says in testimony he is scheduled to deliver on Tuesday in an appearance with Treasury Secretary Steven Mnuchin before the House Financial Services Committee.

In the testimony released on Monday by the Fed, Powell repeats a pledge that the central bank will keep interest rates at their current ultra-low levels until it is sure the economy has weathered the pandemic crisis.

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His comments come as parts of the country are experiencing a surge in coronavirus cases that have prompted governors to backtrack some

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Big Worry For China! High debt catches attention of agencies

The spotlight is on China — and again not for any happy reason. As China’s economy contracted by 6.8 per cent in the first quarter of 2020 and its unemployment rate touched 6.2 per cent in April, its burgeoning debt problem can finally catch the attention of the rating agencies. Its debt-to-GDP ratio stands at 317 per cent at present.

The country`s overall level of debt, driven primarily by real estate and shadow banking, has risen steadily in the last decade.

Deftly, China has kept direct borrowings by the central government at a reasonable level but the accounts of the local governments and its companies and banks are mired in a web which is difficult to analyse.

“The central government is not overleveraged and benefits from ample foreign currency reserves. But regional governments have expanded unsafe financial operations since 2007, and often resort to off-the-counter loans or shadow banking,” a

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Mask-wearing key to US economic recovery: Fed official

Mask-wearing will be key to ensuring a faster US economic recovery from the COVID-19 pandemic, a senior Federal Reserve official said.

“While monetary and fiscal policy have a key role to play, the primary economic policy from here is broad mask-wearing and good execution of these health care protocols,” Xinhua news agency quoted Robert Kaplan, president of the Federal Reserve Bank of Dallas, as saying in a Fox Business interview on Friday.

“If we all wore a mask, it would substantially mute the transmission of this disease, and we would grow faster. We would have a lower unemployment rate,” Kaplan said.

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“We`d be far less likely to slow some of our reopenings. But we`ve been uneven so far on our mask-wearing.”

Although 20 states and Washington D.C. have implemented mandates requiring individuals to wear masks in public, there is no national mandate, according

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