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In
its quarterly policy implementation report, the People's Bank of
China said the authorities face some difficulties and challenges
in promoting an economic recovery amid global uncertainties.
"Prudent monetary policy should be flexible, moderate, precise
and effective... and keep the scale of social financing and the
money supply in line with the expected goals of economic growth
and price levels," the bank said.
The central bank will "strengthen policy coordination and
cooperation, effectively support promoting consumption,
stabilizing investment, expanding domestic demand, and
maintaining prices at a reasonable level", it said.
The world's second-largest economy has been grappling with weak
consumer demand and slowing prices, forcing the central bank to
ease policy, although it faces limited room to manoeuvre due to
worries over capital flight and yuan stability.
Data on Thursday showed China's consumer prices fell at their
steepest pace in more than 14 years in January while producer
prices also dropped, ramping up pressure on policymakers to do
more to revive an economy low on confidence and facing
deflationary risks.
The PBOC said it would "promote the marketization of deposit
interest rates to drive the overall interest rate level
downward."
The bank added that it would also make good use of its pledged
supplementary lending facility to support the property market,
which weighs heavy on China's economic growth prospects despite
having once being a pillar of the economy.
The bank reiterated that it would keep the yuan exchange rate
basically stable at a reasonable level.
(Reporting by Joe Cash and Judy Hua; Editing by Alex Richardson
and Toby Chopra)
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