China's central bank to keep monetary policy stable

13 Aug '21

2 min read

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China's central bank recently said it will maintain the monetary policy’s stability and make it more forward-looking and effective to render strong support to the real economy while avoiding a ‘flood-like’ stimulus. It will coordinate macroeconomic policies for 2021 and 2022, boost high-quality development with moderate monetary growth, and support the continuous recovery of small and medium firms and industries facing trouble.

According to a quarterly report on monetary policy implementation by the People's Bank of China (PBOC), the country has overall adhered to implementing normal monetary policy since the outbreak of the pandemic, with the intensity of monetary policy basically returning to the pre-epidemic level in the first half of this year.

The central bank will maintain a prudent monetary policy that is flexible, precise, reasonable and moderate, stick to normal monetary policy, carry out cross-cyclical policy design, and walk a fine line between economic recovery and risk control, a news agency cited the report as saying.

The report called for efforts to strengthen the flexibility of the RMB exchange rate, stabilize market expectations and enhance macro-prudential management, to ensure the basic stability of the RMB exchange rate at a reasonable and balanced level.

It underscored consolidating stable and sound growth momentum and achieving balanced economic recovery, to ensure a good start to the 14th Five-Year Plan period (2021-2025).

Efforts will also be made to maintain generally stable prices, and guide financial institutions to enhance support for technological innovation, small and micro enterprises, manufacturing and green development, among others, the report added.

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