The People's Bank of China on Sunday said it will fine-tune its policies as needed, suggesting slightly easier monetary conditions ahead as an acute cash crunch exacerbated challenges faced by an already slowing economy.
The bank will continue to implement prudent monetary policy, the central bank said in a statement after a quarterly meeting of the Monetary Policy Committee chaired by Governor Zhou Xiaochuan in Beijing. The PBoC did not mention the exact meeting date but said the meeting was held 'recently'.
The bank said it will pay close attention to the latest global and domestic economic developments as well as changes in international capital flows. The bank also said it will deploy a mix of monetary policy tools to strengthen and improve liquidity management, monetary supply and moderate growth in social financing.
Though the central bank was upbeat about the current economic, financial as well as price situation in China, it said the economy faced many difficulties and challenges. The global economy has improved, but the situation is still complicated, PBoC said.
China will continue to promote exchange rate reforms and maintain the yuan "basically stable" at a reasonable and balanced level, the bank said.
The State Council said last week that the government will firmly guard against financial risks. The cabinet also pledged to increase credit to high tech manufacturing and 'strategic' industries.
In a separate development on Saturday, PBoC's Zhou and Bank of England Governor Mervyn King signed an agreement to establish a reciprocal 3-year, sterling/renminbi currency swap line. The maximum value of the swap is CNY 200 billion.
by RTT Staff Writer
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