China central bank says to keep appropriate liquidity, stable yuan

BEIJING (Reuters) – China’s central bank said on Monday that it would use various policy tools to maintain appropriate liquidity and reasonable growth in credit and social financing.

The People’s Bank of China said it would continue to implement a prudent monetary policy and keep its stance “neither too loose nor too tight”. The central bank said this in a statement after the second-quarter monetary policy committee meeting.

“We will improve and optimise the financing and credit structures, increase the proportion of direct financing and reduce social financing costs,” it said.

China’s economic performance remained generally stable, but “the complexity of the economic situation cannot be underestimated”, the central bank said.

It said major economies had become more divergent. Recovery in the United States is modest, recovery in Europe has yet to be consolidated, the Japanese economy is sluggish and emerging economies face more difficulties.

The central bank also reaffirmed that it would keep the yuan basically stable while pushing forward reforms to improve its currency regime.

A flurry of data from China in coming weeks is expected to show continued weakness in trade and investment, sluggish industrial output and another drop in foreign reserves, reinforcing views that Beijing will roll out more economic support measures soon.

(Reporting by China Monitoring Desk and Kevin Yao; Editing by Nick Macfie)



Categories: Asia Unhedged, China

Tags: , , , , ,