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China Daily Website

China to properly fine-tune monetary policy

Updated: 2012-08-03 09:22
( Xinhua)

weiBEIJING -- China's central bank said Thursday it will take "the proper time" to fine-tune the country's monetary policy as the faster-than-expected slowing economy needs more cash.

Following the government's decision to prioritize stable growth, the People's Bank of China will continue to implement the prudent monetary policy and make the policy more future-focused, targeted and flexible, according to a quarterly report released by the bank's monetary policy analytical team.

Efforts should be made to push the financial service sector to benefit the real economy and create a stable monetary and financial environment to maintain stable consumer prices and promote economic restructuring, the report said.

The central bank will also steadily push forward the market reform of the interest rates' formation system and improve the renminbi's exchange rate mechanism to strengthen its two-way flexibility, according to the report.

Dwindling orders from Europe and other trade partners have sapped China's exports and, combined with a cooling property sector, slowed the country's economic growth rate to 7.6 percent in the second quarter, the lowest level since the first quarter of 2009.

To cope with the faster-than-expected slowdown, the PBOC has cut its lending and deposit rates twice and lowered the amount of funds that banks must keep in reserve.

The central bank is widely expected to further lower interest rates and the reserve requirement ratio amid weakening demand and easing inflation.