Central bank: Monetary policy is flexible

08:50, August 06, 2010      

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China will implement a flexible monetary policy in the second half of 2010 to prop up a stable and healthy economic growth, the country's central bank said in a statement Thursday evening.

The People's Bank of China's monetary policy report for the first six months, said that China's economy will remain stable rise, as a coordinated growth of domestic consumption, investment and exports will continue to prevail.

In the following months, the central bank is to fine-tune monetary policy and ensure adequate credit supply to back up growth, though the global economic recovery from a severe recession looks fragile and China's macro-control faces many uncertainties.

Analysts have believed the policy-makers will not loosen the tightening measures to rein in housing bubbles and stabilize the prices. More credit is expected to be channeled to government-initiated public housing projects, infrastructure including roads, railways and flood-battered irrigation projects.

The central bank said the pressure for wage increases will intensify in the coming months and the government must manage inflationary expectations.

The statement also said that China's economy would see considerable net foreign currency inflows, but repeated there was no basis for big swings in the yuan's exchange rate, which is believed not good for the economy.

The central bank reiterated that it will continue to propel Renminbi or yuan's exchange rate formation system reform, and inspire private sector investment.
In the first six months, China's GDP hit 17.3 trillion yuan, growing 11.1 percent year-on-year. Inflation was at 2.6 percent, within the government's 3 percent bracket.

The central bank said China will keep its appropriately loose monetary policy. During the first six months, banks issued 4.6 trillion yuan of loans, increasing 18.2 percent.
It is estimated China's banks will issue about 4 trillion yuan loans in the second half year.

By People's Daily Online


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