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China Daily Website

PBOC to strengthen monetary policy fine-tuning

Updated: 2012-08-06 16:18
( Xinhua)

BEIJING -- China's central bank said Sunday it will strengthen the fine-tuning of its monetary policy in the second half of this year, indicating as many analysts believe that more liquidity may be injected into the world's second largest economy.

The monetary policy should play a counter-cyclical role in the country's economy and credit policies will be improved to shore up the development of the real economy, the People's Bank of China said in a news release on its website.

It reiterated the significance of making the monetary policy more forward-looking, targeted and effective to support steady and relatively fast economic growth.

The statement came as analysts anticipate further cuts in interest rates and the reserve requirement ratio as China has recently seen weakening demand for its products and easing inflation.

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 this year and lowered the amount of funds that banks must keep in reserve for three times since December last year.

The PBOC also called for carrying forward with financial reforms on Sunday, while urging more efforts to maintain financial stability.

Authorities at all levels must hold firm to the bottom line of not letting any system-wide and regional financial risks occur, it said.