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The
People's Bank of China will keep the yuan basically stable while
forging ahead with reforms to help improve its currency regime,
it said in a statement summarizing the fourth-quarter monetary
policy committee meeting.
The PBOC said it would maintain a prudent monetary policy,
keeping its stance "neither too tight nor too loose". The
prudent policy has been in place since 2011.
"We will improve and optimize financing and credit structures,
increase the proportion of direct financing and reduce financing
costs," it said.
The central bank said it would closely watch changes in China's
economy and financial markets, as well as international capital
flows.
Top leaders at the annual Central Economic Work Conference
pledged to make China's monetary policy more flexible and expand
its budget deficit in 2016 to support a slowing economy as they
seek to push forward "supply-side reform".
The PBOC has cut interest rates six times since November 2014
and lowered banks' reserve requirements, or the amount of cash
that banks must set aside as reserves.
But such policy steps have yielded limited impact on the
economy, as the government has been struggling to reach its
growth target of about 7 percent this year.
President Xi Jinping has said China must keep annual average
growth of no less than 6.5 percent over the next five years to
hit a goal of doubling gross domestic product and per capita
income by 2020 from 2010.
(Reporting by China Monitoring Desk and Kevin Yao; Editing by
Jacqueline Wong)
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