Central Bank Advised to Keep Interest Rate Steady

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Last updated at: (Beijing Time) Tuesday, July 23, 2002

Central Bank Advised to Keep Interest Rate Steady

The Monetary Policy Committee of the People's Bank of China (PBOC) has advised the central bank to keep the interest rate steady in the near future.

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The Monetary Policy Committee of the People's Bank of China (PBOC) has advised the central bank to keep the interest rate steady in the near future.

PBOC sources said that the committee, an advisory body to the central bank, had ended its third-season meeting after analyzing the current economic and financial conditions.

The meeting held that in the first half of this year, China's national economy maintained rapid growth, with domestic and overseas demand constantly improved. The central bank continued its prudent monetary policy and reinforced financial support to economic development while adopting measures to minimize financial risks.

At the end of June, the outstanding broad money (M2) was 17 trillion yuan (about 2.06 trillion US dollars), up 14.7 percent. Outstanding loans stood at 12.8 trillion yuan (about 1.55 trillion dollars), an increase of 870.1 billion yuan (about 105.21 billion dollars). This on the whole demonstrated that the financial industry had been operating smoothly and money supply was basically suited to economic development.

The meeting noted that in the second half year close attention should be paid to new changes in the world's economic and financial situation. The prudent monetary policy should continue, and various monetary policy tools should be used to readjust money supply and rationalize credit structure.

It stressed that commercial banks should further reform their operating mechanisms, reinforce credit marketing ideologies, provide working capital for enterprises with good prospects, support technological remolding projects and improve financial services for middle-sized and small businesses.

Meanwhile, it held that direct financing should be gradually boosted and the corporate financing structure be improved to increase the financial capabilities of middle-sized and small businesses.

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