Tetangco: China needs ‘more cohesive’ monetary policy

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MUCH of the market volatility caused by recent moves by China could be reduced if Chinese monetary authorities provided a “more cohesive” policy package and offered greater clarity in communications, the Bangko Sentral Ng Pilipinas chief said Tuesday.

Tetangco made the comments as part of his keynote address at The Manila Times’ third business forum held at the New World Manila Hotel.

In a follow-up discussion after his speech, Tetangco explained that much of the market turmoil caused by moves such as the recent devaluation of the renminbi was probably avoidable if Chinese authorities were clearer about their intentions, suggesting that policies were not necessarily bad, just not well-communicated.

“For example, look at the ‘circuit breaker’,”Tetangco said, referring to the measure implemented to halt a sharp drop in Chinese equity markets, but then quickly withdrawn, “It was there, then it wasn’t,” which caused a sharp uncertainty-driven drop in Asian and global markets.


“China needs to show the markets that it has a complete policy, and be more transparent about it,” to avoid creating unintended volatility, Tetangco suggested. BEN KRITZ

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