RPT-China must keep lending spread for economy -PBOC chief
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BEIJING Nov 20 (Reuters) - China needs to maintain a certain spread between deposit and lending rates in order for banks to be able to support the economy, Zhou Xiaochuan, the governor of the People's Bank of China, said on Friday. The central bank sets a ceiling on the rates banks may pay depositors and a floor on their lending rates. The built-in margin is a rich source of profit for Chinese banks that strengthens their balance sheets.
Speaking at a forum, the central bank chief also said China must ensure that its pro-investment policies do not lead to overcapacity, which he said was already plaguing some sectors.
Zhou did not refer to the yuan CNY=CFXS in his remarks.
(Reporting by Langi Chiang and Jason Subler; Editing by Alan Wheatley and Jonathan Hopfner)
((alan.wheatley@thomsonreuters.com; +86 10 6627 1235; alan.wheatley.reuters.com@reuters.net))
((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: CHINA ECONOMY/PBOC
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