China central bank vows to increase counter-cyclical adjustment

BEIJING - China's central bank said Sunday that it will step up counter-cyclical adjustment to support the real economy and fend off financial risks.

Restoring development of the real economy will be put at a more prominent position, the People's Bank of China said in its first-quarter monetary policy report, adding it will use both quantitative and structural policies to keep liquidity at a reasonable and ample level, and support the real economy, especially small businesses.

The central bank vowed to seek a dynamic balance among multiple policy tasks, prioritizing ensuring economic growth and employment. It will implement stronger policies to counter the impact of the epidemic, and create a favorable financial environment for epidemic prevention and control as well as restoring development of the real economy.

Continuous spread of the COVID-19 pandemic around the world is dragging the global economy into recession, it said, adding that the duration and adverse impacts of the pandemic may exceed expectations.

The central bank said despite growing challenges and uncertainties, the trend for China's long-term stable and sound development remains unchanged.

It will make the prudent monetary policy more flexible and appropriate, continue to deepen market-oriented interest rate reform and reform on the yuan exchange rate formation system, and maintain two-way flexibility of the yuan.

The central bank reiterated that the property sector will not be used as a means of short-term stimulus, and vowed to maintain efforts to ward off systemic financial risks.