MNI BRIEF: PBOC Keeps Stable Policy as Economy Near Potential

The People's Bank of China will adhere to stable and normal monetary policies given that the country's economic output is near its full potential while inflation is generally controllable, with CPI likely to stay below 2% on average for the year, said PBOC Governor Yi Gang at the 13th Lujiazui Forum in Shanghai on Thursday.

The current level of domestic interest rates is appropriate, higher than that of major developed economies but relatively low relative to developing and emerging economies, said Yi. The central bank will stick to interest rate reform in the loan market, he said.

The PBOC will keep the yuan stable at a reasonable and balanced level, Yi said. It will continue to improve the managed-floating exchange rate system based on supply and demand with reference to a basket of currencies, said Yi.