China's central bank says has cut leverage, but will continue to fight risks

FILE PHOTO: A woman walks past the headquarters of the People's Bank of China (PBOC), the central bank, in Beijing, China June 21, 2013. REUTERS/Jason Lee/File Photo

US-CHINA-ECONOMY-DEBT:China's central bank says has cut leverage, but will continue to fight risks

BEIJING (Reuters) - China's central bank said on Wednesday it has achieved initial results in financial deleveraging but will continue to fend off systemic risks as debt levels in the economy remain relatively high.

"The overall level of leverage is still high, especially the debt pressure on state-owned enterprises is still large," the People's Bank of China said in its fourth-quarter monetary policy implementation report.

"We will fight a tough battle against major financial risks and safeguard the bottom line of systemic financial risks."

Since the fourth quarter of 2017, growth of China's macro leverage ratio has started to fall and financial deleveraging has achieved initial results, the central bank said.

The central bank said it would also strike a balance between stabilizing growth, deleveraging and controlling risks.

The weighted average lending rate for non-financial firms, a key indicator reflecting corporate funding costs, fell 2 basis points in the fourth quarter to 5.74 percent, following a rise of 9 basis points in the third.

The central bank pledged to unwind some of its earlier measures to support the yuan, given that China's cross-border capital flows have become more balanced and the yuan is basically steady against a basket of currencies.

In September, the PBOC scrapped reserve requirements for financial institutions settling foreign exchange forward yuan positions, and stopped requiring foreign banks to put aside reserves for offshore yuan deposits in China.

"It's necessary to make counter-cyclical macro-prudential management measures unveiled previously to curb cyclical fluctuations in the foreign exchanger market return to neutrality," the central bank said.

The central bank has effectively reduced the effect of the "counter-cyclical" factor it introduced in May last year to the formula it uses to determine the mid-point reference rate for the yuan's rate against the U.S. dollar each day.

(Reporting by Beijing Monitoring Desk and Kevin Yao; Editing by Jacqueline Wong)

Related News

Taliban suicide attacks, shootout kill 16 in...

Mar 2, 2017

Twin Taliban suicide bombings and a shootout with Afghan security forces that followed one of the...

At least one dead, 35 wounded in Kabul...

Mar 1, 2017

US-AFGHANISTAN-BLAST-CASUALTIES:At least one dead, 35 wounded in Kabul attacks-Afghan official

Taliban claim attacks in Afghan capital, at least...

Mar 1, 2017

US-AFGHANISTAN-BLAST:Taliban claim attacks in Afghan capital, at least 15 dead

Taliban claim attacks in Afghan capital, at least...

Mar 1, 2017

US-AFGHANISTAN-BLAST:Taliban claim attacks in Afghan capital, at least 15 dead

Death toll from Afghanistan attacks climbs to 22

Mar 2, 2017

The Afghan Health Ministry says the death toll from simultaneous suicide bombings in the capital...

Afghan women fencers aim to parry prejudice

Mar 8, 2017

US-WOMENS-DAY-AFGHANISTAN-FENCING:Afghan women fencers aim to parry prejudice

About Us

Get yourself immersed in engaging topics right here. Daily World Feed is a multi-platform media, providing you latest breaking news straight from the industry.

Contact us: sales[at]dailyworldfeed.com

Subscribe Now!