Could China’s central bank be the first to taper its coronavirus QE measures?

Will be the first country to taper its ultra-aggressive monetary policy campaign in the aftermath of the coronavirus pandemic?

As more countries either maintain their pandemic responses or expand their efforts, China could be at the beginning of reducing its Chinese-style quantitative easing efforts.

The People’s Bank of China (PBoC) suggested on Monday that the central bank will unlikely need to employ additional stimulus and rescue tools to support the world’s second-largest economy.

From FX Daily Report:

Guo Kai, the deputy director of the People’s Bank of China (PBoC)’s monetary policy department, told reporters that there was little need for more emergency stimulus. Since the coronavirus pandemic shut down the Chinese economy, the PBoC has launched ultra-aggressive relief and stimulus efforts to cushion the economic fallout and support growth. Everything from slashing interest rates to injecting the economy with liquidity, the PBoC has pulled out all the stops.

“(Some recent) policies and measures were made in response to the coronavirus outbreak, and once they completed their mission they have exited.

In the next half of the year, the economy will return to normal, and the role of traditional monetary policy may become more obvious. We have entered a more normal state.”

This will be an important week for the Chinese economy as the data will provide a glimpse into how the country performed in June. In addition to the second-quarter gross domestic product (GDP), the government will release industrial production, retail sales, trade, and jobs data.

If true, Beijing could have a leg up in the unofficial currency war since it would appreciate the yuan over its currency rivals.