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Pekin (Reuters) – Chinese central bank governor Yi Gang said the current level of interest rates was appropriate, financial magazine Caixin reported on Tuesday.
Chinese politicians are keen to avoid a further slowdown in the world's second largest economy, which has been stymied by a deadly trade war against the United States.
In a recent interview with Caixin, Yi said that the People's Bank of China (PBOC), the reduction of interest rates will depend on the economic situation of China.
"Overall, our current interest rate level is appropriate," said Yi. "The reduction in interest rates will mainly concern the risk of deflation, but the price changes in China remain moderate."
Yi did not specify at what rate of interest he was referring.
the PBOC has maintained its key rate unchanged since October 2015.
China keeps all its economic policy tools at hand while the trade war with the United States is becoming longer and more expensive, but it is still considering more aggressive measures, such as rate cuts. interest, if the dispute was to worsen, political sources told Reuters.
China will retain its benchmark deposit rate for a long time, but will phase out its benchmark loan rate to unify the benchmark loan rate and market-based rates.
Any rate cuts by China will address the risk of deflation, said Yi.
the PBOC it's committed to gradually unifying two "trajectories" of interest rates – its market-based rates that have been developed in recent years and its benchmark rates – but has never given schedule for this plan.
(Report of the surveillance in Beijing, Stella Qiu and Kevin Yao, edited by Jacqueline Wong)
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