China's interest rate and reserve requirement ratio (RRR) are still relatively high, and the government should further its monetary easing efforts, according to a signed article posted on the website of China's top economic planner on Friday.
To cut business costs and boost investment in China's real economy, the current RRR, which sits at 16.5 percent, is still relatively high compared to other major economies and China's own history, according to the article by Cao Yujin, a research fellow with the economic research institute under the National Development and Reform Commission (NDRC).
The last time the People's Bank of China (PBOC), the country's central bank, reduced the RRR was on March 1, 2016, and the last time the PBOC cut the interest rate was on Oct. 24, 2015.
Cao also recommended debt-equity swaps to lower costs for companies and help stimulate the Chinese economy.
China has rolled out an array of policies to help companies weather the ongoing economic slowdown.
The State Council released a basket of favorable measures on Monday, including lower tax burdens, cheap financing and reduced red tape, as well as more affordable land use, energy consumption and logistics, to bolster lackluster economic growth.
Echoing the State Council, Cao said maintaining abundant liquidity and more monetary easing helps lower the interest rate in the market.
The PBOC started a 14-day 50-billion-yuan reverse repurchase agreement on Wednesday, the first since February. Analysts said the PBOC is being more cautious with policy tools in order to avoid broader stimulus.
The country's economic growth stayed at 6.7 percent in the second quarter, the lowest level since the 2009 global financial crisis.
