BOAO, China (Reuters) -People’s Bank of China Governor Yi Gang vowed on Friday to maintain price stability amid high global inflationary pressure and said monetary policy will focus on supporting small firms and vulnerable groups hit by COVID-19 outbreaks.
In a video speech to the annual Boao Forum for Asia, Yi said China’s financial market is not immune to external shock, and that the latest COVID-19 situation has also put more pressure on the economy.
“Recently, geopolitical tensions have further pushed up inflationary pressures worldwide. China’s financial market is not immune to the external shocks and the domestic COVID-19 situation is also putting more downward pressure on growth.”
“China’s monetary policy is accommodative and is in a comfortable range. We also stand ready to support small and medium-sized enterprises with more instruments, if needed.”
With prices of commodities, food and housing soaring worldwide last year, the Ukraine war has added even more momentum to global inflation, threatening economic recovery worldwide and global financial stability.
In light of growing headwind, foreign finance houses have been downgrading gross domestic product (GDP) forecasts for China, increasing the pressure on China to hit its 5.5% target for 2022.
Japanese investment bank Nomura on Thursday revised its China GDP forecast to 3.9% for this year from 4.3%, its baseline estimates showed.
(Reporting by Kevin Yao; Writing by Ellen Zhang and Ryan Woo; Editing by Tom Hogue and Christopher Cushing)
