China’s central bank elaborates monetary policy priorities

BEIJING — China’s central bank has vowed to innovate and improve financial regulation to serve the real economy, prevent financial risks and deepen financial reforms.

The prudent monetary policy, with easing or tightening only as appropriate, should stress counter-cyclical adjustment and maintain proper macro-regulation to strive for a balance among multiple policy targets, the People’s Bank of China said when mentioning policies in the next stage in a report on monetary policy implementation in the fourth quarter of 2018.

Dousing speculation about an quantitative easing (QE) policy to aid the economy, the report said there is still ample room to maneuver the monetary policy, and it is unnecessary for the central bank to massively buy assets such as treasury bonds and conduct the so-called QE policy.

Efforts will be made to encourage the country’s financial institutions to enhance support to small and private companies, high-tech enterprises and emerging industries as well as restructuring and upgrading of the manufacturing sector, according to the report, released Feb 21.

It said the central bank will continue to deepen market-based interest rate reform and reform on the renminbi exchange rate formation system.

The central bank will work to maintain the flexibility of the yuan’s exchange rate, enhance macro-prudential management if necessary to stabilize market expectations and maintain the basic stability of the yuan’s exchange rate at a reasonable and equilibrium level.