China’s central bank says it is considering steps to loosen credit, just days after the country posted its largest trade deficit in more than a decade.

People’s Bank Governor Zhou Xiaochuan said the bank must still weigh the advantages and disadvantages of reducing the amount of money banks are required to hold in reserve. But he noted that after several increases in the past year, the reserve ratio is at a historically high level.

“Now the deposit reserve ratio is a bit more than 20 percent. We have been under that. At the end of the 90s the deposit reserve ratio was just six percent. When we observe the other countries we find that some ratios are even lower. Therefore, the scope is very large. At the same time, we have to watch the necessity for adjustments. That is to say, we need to watch how much market liquidity there is.”

Lowering the ratio would enable banks to lend more of their money, stimulating the economy.

Zhou and other bank officials also suggested the Chinese currency is drawing closer to its fair market value, as evidenced by the large trade deficit reported Saturday. He said this will make it possible for China to allow market forces to play a bigger role in determining the currency’s value.

“In general, as the renminbi exchange rate approaches a balance point, the market demand and supply will play a bigger role. This is to say, we will allow and encourage the market’s demand and supply to play a bigger role. The degree of the central bank’s participation and intervention in the market will decrease in an orderly manner.”

But, Zhou said, the exchange rate is tied to a number of currencies, including the yen, pound sterling and euro as well as the U.S. dollar.

U.S. officials have argued that the yuan is undervalued by as much as 30 percent against the dollar, giving Chinese exporters an unfair advantage in global markets. But after allowing a gradual rise in the currency over the last year, Beijing has been pushing the yuan back down in recent days.

The moves come after China posted a trade deficit of more than $31 billion in February, a startling turnaround after years of huge surpluses that have made China the world’s largest creditor nation.

China’s trade balance traditionally sags in February because of work disruptions caused by the annual new year holiday, but this year’s deficit was much higher than expected.

Imports rose more than twice as fast as exports during February when compared to the same month a year ago. Total imports in February stood at almost $146 billion compared to exports of less than $115 billion.