In recent days there have been growing rumours that China’s PBoC was about to embark on a large-scale “QE” program that would see the bank buy large amounts of local government debt. Senior officials now seem to be keen to quell the market chatter.
Speaking to website Yicai.com and reported by Reuters Ma Jun, chief economist of the People’s Bank of China, has scotched rumours that the PBoC is about to launch a QE program, suggesting instead there are already enough monetary policy tools available to sustain reasonable growth in liquidity and money supply.
The rumours that the PBoC was about to embark on large scale purchases of Chinese local government debt helped propel Chinese stocks higher by over 3% on Monday.
With markets up close to 40% so far in 2015 it’ll be interesting to see the early investor reaction once trading gets underway today.