MNI POLICY: PBOC Pledges Flexible and Targeted Policy

The People's Bank of China will keep monetary policy flexible and targeted while maintaining a prudent stance, it said during its annual work conference Wednesday, adding that it would ensure a stable yuan exchange rate and address financial risks via enhancing regulation and reform.

The PBOC will deepen market-oriented reform of the yuan exchange rate, enhance macro-prudential management and guide market expectations in a bid to keep the yuan stable at a reasonable and balanced level, according to a statement on its website. China will proceed with yuan internationalisation at a stable and cautious pace, coordinating the development of onshore and offshore markets, it said.

The PBOC will also would improve the money supply mechanism and ensure the money supply and total social finance grow in line with nominal GDP. It will further reform the loan prime rate, and move towards liberalising its deposit rate.

The PBOC will support small and micro-sized businesses with structural tools and loan policies, as well as enhancing regulation of internet financial services and scrutinising property transactions.

The State Administration of Foreign Exchange said it will prevent abnormal cross-border capital flows and disorderly volatility in the foreign exchange market. SAFE will further facilitate cross-border investment and financing and assist financial institutions in introducing more forex derivatives.