PBoC likely to roll out more monetary easing measures to boost China’s economic growth, says Scotiabank

The People’s Bank of China (PBoC) is expected to roll out more monetary easing measures to boost China’s economic growth, although it will not resort to "flood-like" stimulus in monetary policy, according to the latest research report from Scotiabank.

The central bank’s assets expanded by CNY1.34 trillion on a monthly basis to CNY37.25 trillion as at end-December.

The central bank further said it will continue to implement prudent monetary policy but that doesn't mean the monetary condition will be maintained unchanged, according to its Q4 monetary policy implementation report released last Thursday.

US President Donald Trump tweeted on Monday morning (HKT/SGT), "I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues", the report added.

The politburo, China’s top decision-making body of the ruling party, on Friday held a meeting to discuss a draft report on the work of the government and deliberate several other documents.

According to a post-meeting statement, efforts will be made to seek progress in the tough battles against risks, poverty and pollution and to keep the economy running within a reasonable range.

The statement said China should coordinate its macroeconomic, structural and social policies and properly implement the proactive fiscal policy, prudent monetary policy and policies to prioritize employment to achieve the economic and social development targets this year.

"We remain moderately bullish on the yuan, maintaining our short USD/CNH position but with a new target of 6.60," Scotiabank further noted.