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Prudent Monetary Policy Contributes to Economic Growth
The Chinese economy is growing smoothly, and the prudent monetary policy continues to play a significant role in the country's economic growth, according to the third quarter meeting of the Monetary Policy Committee of the People's Bank of China held Thursday in Beijing.
Participants analyzed China's economic and financial conditions and the execution of monetary policy in the first half of this year. By the end of June, the broad money (M2) increased 14.3 percent, while narrow money (M1) increased 14.9 percent. The outstanding loans stood at 10.7 trillion yuan, increasing more than 750 billion yuan over the beginning of the year.
The group studied economic and financial conditions and monetary policy measures for the second half of this year, with the focus on the impact of the slowdown of the global economy on China's economy and finance.
Participants held that in the second half year the monetary policy should continue to pursue the principle of expanding domestic demand, maintain its continuity and stability, exploit various monetary policy tools with flexibility, and maintain appropriate growth of the money supply.
The meeting predicted that for the whole year the broad money will grow by 13-14 percent; narrow money will grow by 15-16 percent; loans by financial institutions will increase by 1.3 trillion to 1.4 trillion yuan; and the total credit volume will be controlled within the target set at the beginning of the year.
It stressed that the current interest rates for deposits and loans in Renminbi should remain stable, the current managed floating exchange rate system should be adhered to and improved, and efforts should be made to make sure the exchange rate of RMB remains basically stable.
In addition, efforts should also be made to regulate and coordinate the development of money and capital markets, improve related management measures and reinforce the self-disciplinary abilities of enterprises, commercial banks and securities companies.
The meeting was chaired by Dai Xianglong, governor of the central bank and chairman of the Monetary Policy Committee.
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