PBOC outlines 'moderately loose' monetary policy

China's central bank has outlined a "moderately loose" monetary plan aimed at boosting domestic demand to spur growth, days after President Xi Jinping called for more proactive macroeconomic policies.

Beijing last year struggled to lift the economy out of a slump fueled by a property market crisis, weak consumption and soaring government debt. Officials have unveiled measures aimed at bolstering growth, including cutting interest rates and easing homebuying restrictions, but economists have warned more direct stimulus is needed.

The People's Bank of China said it will "implement a moderately loose monetary policy ... to create a good monetary and financial environment for promoting sustained economic recovery."

It reiterated plans to cut interest rates and the reserve requirement ratio which dictates how much banks must hold in their coffers, rather than lending or investing.

The PBOC said it will continue to help local governments resolve debt burdens with "financial support."

The measures are to "prevent and resolve financial risks in key areas, further deepen financial reform and high-level opening up, focus on expanding domestic demand, stabilizing expectations, and stimulating vitality," it added.

Beijing was aiming for growth of around 5 percent in 2024, which many economists believe will be narrowly missed.

The International Monetary Fund expects China's economy to have grown by 4.8 percent in 2024 and to grow 4.5 percent in 2025.

Separately, "high-quality foreign capital" will be encouraged to invest in China's domestic technology sector, according to the State Administration of Foreign Exchange website.

The government will optimize the management of overseas-traded Chinese companies' funds and continuously improve the supervision policies governing multinational corporations' capital, it added.

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