As China’s central bank projects confidence, are rate cuts on the back burner?

China’s central bank vowed to maintain an accommodative monetary policy stance and improve policy transmission to support the “steady” economy in its latest quarterly report, which analysts said signalled a reduced urgency for rate cuts.

The People’s Bank of China will implement a “moderately loose” monetary policy and ensure “reasonable and ample” liquidity to serve the real economy, according to the report released on Tuesday.

The central bank called for “effective implementation of both countercyclical and cross-counter cyclical adjustments”, replacing the previous phrase “strengthen countercyclical adjustments”.

“The People’s Bank of China maintained its ‘moderately loose’ policy stance, but the renewed emphasis on cross-cyclical adjustments signalled an even less dovish tone” than the previous quarterly report released in August, Goldman Sachs analyst Xinquan Chen said in a research note released on Wednesday.

On credit policy, the central bank downplayed a recent slowdown in new loans, instead emphasising targeted credit policy support.