People's Bank of China Zhou Xiaochuan on Friday vowed to maintain stability in the financial markets and "adjust" liquidity as and when required, further easing concerns that the cash crunch in the world's second largest economy will hamper growth.
Zhou's remarks helped to calm investor sentiment which was shaken by week-long turmoil caused by the liquidity squeeze.
PBoC will make comprehensive use of various tools and instruments and adjust market liquidity in a timely manner while maintaining the overall stability of the market, Zhou said, according to a statement posted on the central bank website.
He said the bank will maintain a prudent monetary policy and will continue to fine-tune it. He also promised to speed up the process of making yuan convertible on the capital account.
On Tuesday, the central bank said it has provided liquidity support to some financial institutions to ensure the smooth operation of the money market.
The central bank had also said that it will use a combination of open market operations, short-term liquidity adjustments, standing facility lending and other measures to ensure money market stability.
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