Policies introduced to tackle liquidity

Lawmakers on Friday passed two fiscal policies aimed at mopping up excessive liquidity in the economy.

The Standing Committee of the National People's Congress authorized the government to reduce or suspend tax on interest income. They also approved the Ministry of Finance to issue 1.55 trillion yuan in special bonds to purchase foreign exchange from the central bank to finance a new State investment agency.

Analysts said the effectiveness of these measures in mopping up excessive liquidity will depend on further government moves.