Macroeconomic control takes effect
Updated: 2006-10-01 08:43

BEIJING, Sept. 30 -- The People's Bank of China (PBOC), China's central bank, has said the government's macroeconomic controls have begun to curb the country's runaway growth.

The third-quarter meeting of the currency policy committee (CPC) of the PBOC heard that the central bank had been closely monitoring the economic and financial situation and using a variety of monetary policies to curb the sharp growth of loans and maintain a stable financial situation.

However, irrational economic structures, pressure on the environment and resources and the imbalance of international payments were major problems threatening China's economy, said a bulletin on the official PBOC website.

The government needs to maintain the continuity and stability of the macro-control policies to expand domestic demand, improve investment structures, and to promote the proper growth of investment.

Comprehensive measures should be taken to accelerate the improvement of the economic structure, to promote the economic growth mode to move onto a more efficient way, and to realize a harmonious and sustainable development of the economy, said the bulletin.

Chaired by Zhou Xiaochun, governor of the PBOC and chairman of the CPC, the committee discussed China's monetary policies in the next phase.

A prudent monetary policy was recommended as coordination of domestic and foreign monetary policies, and supervision of fluidity needs to be improved, said the bulletin.

The growth of loans needed to be controlled at a reasonable level with direct financing be encouraged and efforts made to expand the intermediate business of commercial banks to improve their profit and loss structures.

The PBOC reiterated its principles of activeness, preemption and control of the RMB exchange rate system, it said.

The PBOC would further improve the system of managed floating foreign currency exchange rates based on market supply and demand to keep the RMB exchange rate stable at a reasonable and balanced level.