G20 Releases Fiscal And Monetary Easing Signals

In order to cope with the current global economic recovery and the risk of aggravating the difficulties, just now

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The communiqu of the meeting of the finance and central bank governors shows that G20 countries will individually and jointly take all policy tools, including monetary, fiscal and structural reforms, to boost growth.

From the content of the communique, the "double loose" of fiscal and monetary policy is approaching.

Last year, a number of economies around the world began to fight for currency devaluation, and there were many competitive devaluations.

But the communique still said that monetary policy will continue to support economic activities and maintain price stability.

Lou Jiwei, Minister of finance, also said at the news conference of the chairman of the conference that monetary policy may continue to be moderately relaxed.

Since October last year, the central bank has suspended such measures as lowering interest rates and cutting interest rates, replacing the more frequent open market operations and the shorter and more flexible monetary instruments such as standing stock and MLF.

Analysts said that this is done out of consideration of exchange rate, because lowering interest rates and lowering interest rates will trigger the expectation of devaluation of the renminbi.

Since the 8 / 11 exchange reform last year, the exchange rate of RMB against the US dollar has fallen by 5%, and foreign exchange reserves and foreign exchange reserves have continued to decline.

Zhou Xiaochuan, governor of the central bank, said at a press conference in February 26th that the people's Bank's monetary policy is in a steady and slightly relaxed state at present.

But when answering questions about whether the renminbi would continue to depreciate and create an environment for exports, Zhou Xiaochuan gave a clear negative response.

"China has always been opposed to winning through competitive depreciation.

Competitive power.

In general, China's export capacity is very strong. Last year, hundreds of billions of dollars of goods trade surplus was achieved, and we will not participate in competitive devaluation to enhance export capacity. "

Zhou Xiaochuan said.

While moderately loose monetary policy is effective, how to use fiscal policy has been put on the table by G20.

The communique said that monetary policy alone can not achieve balanced growth. We will flexibly implement fiscal policies to promote growth, create jobs and boost market confidence.

Lou Jiwei also stated that although monetary policy will remain moderately relaxed, monetary policy will certainly not replace fiscal policy.

Li Huiyong, chief macroeconomic analyst at Shenyin Wanguo, told reporters that many economies choose monetary policy to stabilize demand. In fact, these countries have little room for fiscal policy to play.

However, China's fiscal policy still has great leeway to play, especially in terms of deficit rate.

In fact, China has been implementing loose and aggressive fiscal policies. China also pays more attention to fiscal policy in making macro policies.

The reason is, Li Huiyong said, China is in the stage of reform and pformation. Compared with monetary policy, fiscal policy is more obvious for pformation and reform.

In addition to fiscal and monetary policies, the communiqu also highlighted the role of structural reform.

The communique said, "accelerating structural reform will enhance the potential growth in the medium term and make the economy more innovative, flexible and resilience".

Lou Jiwei also believed that under the current circumstances, the conditional member countries had better implement expansionary fiscal policies, and those unable to implement expansionary fiscal policies should accelerate structural reforms.