China’s central bank chief hinted at a blueprint for a new toolkit that could open the door to the biggest policy overhaul in years as officials try to boost growth in the world’s second-largest economy.
Pan Gongsheng, governor of the People’s Bank of China, gave the clearest signal yet in a speech in Shanghai on Wednesday that the authority could start trading government bonds on the secondary market. This shift has the potential to change the way the central bank injects money into the economy and regulates liquidity.
Pan also hinted at interest rate reforms, indicating the bank will consider switching to using a single short-term rate to guide markets. That could reduce the importance of the current one-year policy rate, known as the medium-term lending facility, which was introduced a decade ago.
