According to the Financial News, a newspaper sponsored by the People's Bank of China, citing an anonymous senior central bank official on Wednesday, the Chinese central bank will increase demand and support a modest price recovery.
The official was cited as stating that the People's Bank of China would increase its coordination with industrial and fiscal policies and boost expectation-setting while closely observing the outcomes of financial measures.
According to the official, the central bank would establish an adequate monetary and financial climate to support effective consumer demand in the real economy, encourage a modest price recovery, and boost economic vibrancy.
The official was cited as noting that China's robust credit expansion was also consistent with the recovery because real economy borrowing rates had decreased.
As the central bank strove to support economic development in the face of weak domestic and international demand, new bank loans exceeded forecasts by almost quadrupling in August versus July's level.
In order to boost its struggling economy after the post-pandemic recovery stalled, China has recently introduced a number of policies, including interest rate reductions and attempts to ease property regulations.
As deflationary pressures subsided and signs of economic stabilization emerged in August, China's consumer prices resumed their upward trend.
Beijing officials have long denied prediction of any longtime deflation.
According to the official, lowering current mortgage rates will significantly lower the cost of interest for residents.
As part of moves to support the struggling real estate market, five of China's main government-owned banks said last week that they will begin reducing rates of interest on existing loans for first-home loans.
The official claimed that the reduction in early mortgage repayments would increase consumer confidence.