China’s central bank chief hinted at a blueprint for a new toolkit that could open the door to its biggest policy overhaul in years, as officials try to bolster growth in the world’s No.2 economy.
Pan Gongsheng, governor of the People’s Bank of China, gave the clearest signal yet that the authority may start trading government bonds in the secondary market, during a speech in Shanghai on Wednesday. That shift has the potential to rewire how the central bank injects money into the economy and regulate liquidity.
Pan also hinted at interest-rate reform, signaling the bank will consider moving 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, introduced a decade ago.