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2017.06.1119:46:00UTC+00PBOC Maintains $5 Trillion Balance Sheet as Fed, ECB Look for Exit

China's $5 trillion balance sheet is seen to remain for now and could still even grow, according to a Bloomberg survey.

Economists said China is still more than a couple of years afar from reducing its balance sheet. They pointed out that expansion in the broad money supply is still running below the official government target. Over 70 percent of economists project PBOC's assets will be around the same size or larger by the end of the year.

The results of the poll of People's Bank fo China watchers shows China's central bank is takng an opposite direction compared to the route major central banks around the world are taking. Federal Reserve is looking to reduce its $4.5 trillion asset holdings and the ECB will likely stop increasing its pile by the end of 2017 as economic outlook brightens.

The PBOC balance seen is fundamentally different from those of its global peers. The Chinese central bank assets climbed through capital inflows and trade surpluses rather than piling up on government bonds.

The balance sheet has broadly leveled off and assets have contracted 3.1 percent from January-March 2017.



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