China's central bank says it will make policy flexible, targeted in 2021

FILE PHOTO: A man walks past the headquarters of the People's Bank of China (PBOC), the central bank, in Beijing, China September 28, 2018. REUTERS/Jason Lee

BEIJING (Reuters) -China’s central bank said on Wednesday it would make its monetary policy flexible, targeted and appropriate in 2021, focusing on supporting small firms as the economy recovers.

The People’s Bank of China (PBOC) will continue to rely on structural policy tools and credit policies to support small enterprises and extend deferred loan repayments for small businesses, it said in a statement on its website.

The central bank has rolled out a raft of measures to support the virus-jolted economy, but analysts say it has shifted to a steadier stance as the economy recovers.

The central bank will scale back support for the economy in 2021, but fears of derailing a recovery from a pandemic-induced slump and debt defaults are likely to prevent it from tightening anytime soon, policy sources have said.

The PBOC said it would deepen reforms of its loan prime rate, while promoting deposit rate liberalization.

It will also step up regulation of financial activities by internet platforms and regulation of payment services, requiring personal credit ratings firms to operate with licenses.

The central bank will prohibit companies from over-marketing of financial products and luring consumers into excessive borrowing, it added.

The central bank also said it would implement prudential management of property finance and improve a policy system of financial support for the rental housing market.

Reporting by Lusha Zhang, Judy Hua, Leng Cheng and Kevin Yao; editing by Andrew Heavens, Larry King