Central bank official reaffirms stable yuan policy

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Last updated at: (Beijing Time) Friday, October 31, 2003

Central bank official reaffirms stable yuan policy

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A senior official with the People's Bank of China, China's central bank, said here Thursday that China will continue to adopt a sound monetary policy in order to maintain the stability of its currency, the renminbi (RMB).

Mu Huaipeng, deputy director of the currency policy department under the central bank, made the remarks while explaining the objectives and stance of China's monetary policy at the fourth UK-China forum.

Mu said the objective of China's monetary policy is to keep the RMB stable and boost the country's economic growth within a stable financial environment.

To realize the objective, China will, in the first step, hold to a sound monetary policy principle and handle properly the relations between curbing financial risks and boosting economic growth, he said.

Secondly, Mu said China will gradually liberate its interest rates so as to accelerate the Chinese economy's integration into the world economy and to realize that the market mechanism will play a major role in financial resource allocation.

He said China will encourage financial institutions to make loans to farmers and agricultural projects and to small- and medium-sized enterprises so as to support the country's economic restructuring and expand domestic market demand.

Fourthly, he said China will adjust its monetary policy to encourage rural finance development and provide funds to support agriculture upgrading and rural development.

In the end, Mu said China will also coordinate its currency policy with foreign exchange policy. This was aimed at realizing a general balance between purchase and supply in the foreign exchange market, he said.

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