i would like to brief you on the work of the people ’ s bank of china ( pbc ) in practicing sound monetary policy in a more flexible and appropriate manner and implementing the requirements of the government work report on securing market entities in the fight against the covid - 19 pandemic since the beginning of this year. first, by leveraging quantitative monetary policy tools, we expanded aggregate supply with a focus on easing financing difficulties. in h1 2020, with respect to monetary policy, we rolled out a mix of forceful supporting measures, including three rounds of required reserve ratio ( rrr ) cut, additional rmb1. 8 trillion quotas for central bank lending and central bank discount, a program for supporting credit - based loans to micro and small businesses ( msbs ), and the phased deferment of loan principal and interest repayments for micro, small and medium - sized enterprises ( msmes ). these measures have yielded solid results. at end - may, the growth rates of broad money ( m2 ) and the aggregate financing to the real economy ( afre ) reached 11. 1 percent and 12. 5 percent respectively, both remarkably higher than those of last year. the stock market, bond market, foreign exchange market and rmb exchange rate were generally stable. since q2 2020, china ’ s major macroeconomic indicators have displayed favorable signs of recovery. in h2 2020, we will continue to keep liquidity adequate at a reasonable level through monetary policies, which is expected to bring about expansion in rmb loans by nearly rmb20 trillion and growth in afre by over rmb30 trillion throughout the year. second, by advancing the market - based interest rate reform, we guided a continuous decline of market rates and promoted the financial sector to reasonably mark down profits to support enterprises, in an attempt to alleviate high financing costs. since the beginning of 2020, the financial sector has marked down profits to support enterprises in three ways, namely lowering interest rates, adopting monetary policy tools that can directly support the real economy, and reducing banks ’ charges. it is estimated that, with these measures, the financial system will mark down rmb1. 5 trillion worth of profits to support enterprises throughout the year. 2 / 3 bis central bankers'speeches third, by strengthening write - offs and disposal of bank non - performing loans ( npls ), we made efforts to solve the sustainability problem related to the support of the financial sector for the real economy. under the impact of the

imprecise exercise, and all the more so for a country ( such as sa ) with such a high rate of inactivity and where the responsiveness of wage and price inflation to changes in unemployment is low. in addition, in recent years the task has been further complicated by uncertainty over the extent to which electricity supply limitations have constrained potential output growth in south africa ”. 4 replicating work by borio, disyatat, and juselius ( 2013, 2014 ) at the bank of international settlements ( bis ), which incorporates financial cycle characteristics into the estimation, some estimates suggest that south africa ’ s potential growth rate declined from 4 per cent in 2007 to around 2½ per cent in 2013, compared to earlier estimates which suggested that current potential growth rates was around 3 to 3½ percent5. this development is not unique to south africa as several studies show that potential growth may have been over - estimated in many emerging market economies. monetary policy response the operating environment for south africa ’ s monetary policy has become increasingly complex, with growth and inflation dynamics being influenced by a range of global and domestic factors, which call for delicate trade - offs in terms of policy settings. recent developments suggest that the period of relatively low volatility has come to an end. market participants and policy makers now have to grapple with the possibility or risk that the lift - off of rates in us may occur sooner than they anticipate, while in japan and the eurozone more easing seems to be on the way, while risks assigned to geo - political risks, which the oecd ( 2013 ), oecd economic surveys : south africa 2013, oecd publishing. see http : / / www. oecdilibrary. org / economics / oecd - economic - surveys - south - africa - 2013 _ eco _ surveys - zaf - 2013 - en. anvari, v., r. steinbach, and n. ehlers ( 2014 ). a semi - structural approach to estimate south africa ’ s potential output. south african reserve bank working paper wp / 14 / 08. bis central bankers ’ speeches market seems relatively relaxed about, may intensify. all these factors are likely to increase volatility. recent experience has shown us how sensitive our domestic market are to the international backdrop. against the background of south africa ’ s elevated current account deficit, which is expected to only correct slowly, the risk of abrupt swings in capital