China’s central bank to keep monetary policy stable

BEIJING — China’s central bank on Aug 9 said it will maintain the stability of monetary policy and make it more forward-looking and effective, to render strong support to the real economy while avoiding a “flood-like” stimulus.

The bank 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-sized firms as well as industries in difficulties, according to a quarterly report by the People’s Bank of China (PBOC) on monetary policy implementation.

Overall, China has adhered to implementing normal monetary policy since the outbreak of the COVID-19 epidemic, with the intensity of monetary policy basically returning to the pre-epidemic level in the first half of this year, the report said.

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, the report said.

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, according to the report.

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