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China PBOC Hands Over CNY800 Billion in Profit to Central Government, State Media Says

China's central bank has submitted 800 billion yuan ($119 billion) worth of profit so far this year to the central government, in a bid to support fiscal spending as the world's second-largest economy faces intense downward pressure, according to Chinese state media.

The profit handover was equivalent to the amount of liquidity released from a 0.4-percentage-point cut in banks' reserve requirement ratio, said Dong Huajie, head of the state treasury bureau under the People's Bank of China, during a briefing Monday, according to the state-run China Securities Journal.

In March, the central bank said it would transfer profit of more than CNY1 trillion from its vast foreign-exchange reserves to the central government to help finance fiscal spending this year. The PBOC had said earlier that the funds submission will be made in a balanced way on a monthly basis.

The accelerated payments could provide bigger support for the government's fiscal spending, Mr. Dong said at the briefing. He added that the overall profit submission will be over CNY1.1 trillion, which could drive up M2, China's broadest measurement of money supply, by 0.5 percentage point this year.

 

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(END) Dow Jones Newswires

May 10, 2022 04:39 ET (08:39 GMT)

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