China's central bank pledges to support domestic demand

China's central bank pledges to support domestic demand


China's central bank pledges to support domestic demand

Follow on
Follow us on Google News

BEIJING, (Reuters) - China's central bank on Monday said it would fend off systemic risks to the economy and use forceful and targeted monetary policy to better support domestic demand.

In its quarterly policy implementation report, the bank laid out the general direction of financial policy and said it would use a variety of monetary tools at its disposal to ensure sufficient liquidity.

"Prudent monetary policy should be precise and forceful, with greater emphasis on cross-cyclical and countercyclical adjustments, enriching the monetary policy toolbox," the bank said.

The bank added it would "further unblock the monetary policy transmission mechanism", enhance the stability of financial support for the real economy and keep prices "reasonably stable".

China's economy is gaining momentum, but it faces challenges such as an imbalanced global economic recovery and an unstable foundation for domestic economic recovery, the central bank said.

Beijing has launched a slew of policy measures this year, seeking to shore up a feeble post-pandemic recovery amid a persistent property sector downturn, local government debt risks, slow global growth and geopolitical tensions.

The bank said it would guide financial institutions to resolve local debt risks and noted there was urgency for faster economic transformation.

"Supply and demand dynamics in the property market have greatly changed," the central bank said.

The bank said it would keep the yuan -- which has come under pressure on the foreign exchange market this year -- "basically stable" and strive to foster a sound monetary and financial environment.

It reiterated that it expects to achieve around 5% growth this year.