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BEIJING May 6 China's central bank said on
Tuesday it would keep monetary policy steady with timely
fine-tuning to help stabilise economic growth, while introducing
greater yuan flexiblity.
The People's Bank of China will use a combination of policy
tools to keep liquidity ample and maintain stable money market
rates, it said in its first-quarter monetary policy
"We will maintain appropriate liquidity and achieve
reasonable growth in money supply, credit and social financing,"
the central bank said in the report published on its website,
The central bank will use policy tools, including open
market operations, reserve requirement ratios (RRR), and
re-lending, re-discount, short-term liquidity operations, in a
flexible way in response to economic changes, it said.
While maintaining its longstanding prudent monetary policy,
the central bank has started to fine-tune its stance to support
the slowing economy. Last month, the central bank cut RRR for
rural banks and cooperative banks to shore up the weaker
agricultural industry in the economy.
The PBOC also pledged to keep the yuan basically
stable while pushing reforms to help introduce greater two-way
flexibility in the currency.
The yuan hit a two-week high on Tuesday as traders suspected
China's central bank of intervening to support the currency
after it touched a 18-month low against the dollar last week.
In March, the central bank doubled the yuan's daily trading
band against the dollar.
A survey conducted by the central bank during the first
quarter showed that 92.5 percent of Chinese trading companies
believed that the scope of yuan fluctuations was "acceptable",
About a third of respondents in the survey expected the yuan
to depreciate in the next half-year, while 66.9 percent believed
the yuan would appreciate, the central bank said.
The PBOC also reiterated its pledge to push interest rate
reforms, including expanding the interbank market for
certificates of deposit(CDs).
It also pledged to take measures to maintain financial
stability and reduce systemic risks.
(Reporting by Kevin Yao; Editing by Ron Popeski)