The head of the Chinese central bank pledges to provide sufficient liquidity, by Reuters

HONG KONG (Reuters) – China’s central bank chief said on Monday that the government will support a moderately accommodative monetary policy to maintain ample liquidity as it tries to stimulate the economy and mitigate the impact of geopolitical uncertainty.

Pan Gongsheng, Governor of the People’s Bank of China, said that the central bank will apply various tools such as interest rates and the required reserve ratio to provide liquidity in the market.

This observation underscores Beijing’s commitment to using what could be its most aggressive monetary tactics to revive the world’s second-largest economy.

The central bank will significantly increase the country’s foreign exchange reserves in Hong Kong’s asset allocation, Pan told the Asian Financial Forum in Hong Kong, without providing details.

The head of the People’s Bank of China said Beijing will also support the Hong Kong Monetary Authority to use the “swap fund” plan to replenish market liquidity.

The currency swap agreement currently allows Hong Kong to swap up to 800 billion yuan.