One Country – Two Monetary Policies: Evidence from a new indicator of the PBoC’s monetary policy support for poor regions

In recent years, one of the PBoC’s major issues was to avoid a generally conservative monetary policy that would jeopardize the central government’s poverty-alleviation strategy by limiting credit supply in rural areas where it is already scarce. We develop a range of new indicators to measure those aspects of the PBoC’s policy and demonstrate that the PBoC has successfully implemented policies targeted at poor counties. That is, we show that a central bank has the general potential to address regional diversity and distributional issues.