China to keep monetary condition stable: central bank


Beijing: China’s central bank has vowed to keep the monetary environment stable in the coming months.

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“The preemptive fine-tuning of macro policies and the structural reform measures are gradually taking effect, and the economy is expected to keep steady and relatively rapid growth,” the People’s Bank of China (PBOC), the central bank, said in its latest monetary policy report released late Friday.

The bank said China’s economic growth has been affected by structural and cyclical factors, thus making the tasks of economic restructuring and changing the development pattern “very pressing”, reported Xinhua.

The central bank warned that the Chinese economy is still facing a “complicated” environment at home and abroad, as external demand remains weak due to the lingering impact of the global financial crisis and domestic momentum for intrinsic growth needs to be consolidated.

China’s GDP growth slowed to 7.4 percent in the third quarter of the year, marking the seventh consecutive quarter of decline.

The bank noted that China is still in the process of urbanization, informatization, industrialization and agricultural modernization, but the fundamental factors that support steady and rapid economic growth remain basically unchanged.

China will focus on maintaining stable monetary conditions while striking a balance between economic growth, price stability and risk prevention, according to the report.

The country needs to handle the relationship between maintaining stable and relatively fast growth, adjusting the economic structure and managing inflation expectations.

While priority should be given to stabilizing growth, the government will continue with its prudent monetary policy, making it more targeted, flexible and forward-looking with more fine-tuning methods, the report said.

The government will maintain market liquidity at a reasonable level, as well as keep steady and reasonable growth in lending and social financing, by using combined monetary tools and improving the macro-prudential policy framework.

The government will also push forward the market-based reform of interest rates.

China’s central bank has moved twice this year to lower both banks’ reserve requirement ratio and interest rates, respectively, in a bid to buoy the slowing economy, which has been dragged down by global economic woes and equally weak domestic demand.