Central bank stresses neutral monetary policy, financial regulation

BEIJING — China's central bank said Tuesday it would continue to implement a prudent and neutral monetary policy and step up financial regulation to prevent systemic risks.

The People's Bank of China (PBOC) will maintain moderate credit growth and basically stable liquidity to provide a suitable monetary environment for the supply-side structural reform, according to a PBOC statement released after a meeting attended by heads of PBOC branches Monday and Tuesday.

Transactions on financial markets will be strictly regulated, while oversight on Internet finance will be strengthened, the statement said.

Risk monitoring and early warning, as well as the financial "defense line" and the emergency response system will be enhanced, it said.

The central bank also vowed to intensify counter-cyclical adjustment and improve integrated supervision on systemically important financial institutions.

Reforms will be made to liberalize interest rates and enhance the formation mechanism for the yuan's exchange rate, which will be kept basically stable at a reasonable and balanced level.

In addition, the PBOC will steadily open up the financial sector and promote the yuan's international use, according to the statement.

It also pledged to increase financial support for priority areas and weak links in the real economy, providing it with more convenient and lower-cost financing.

Tuesday's statement came after a key quinquennial national financial work conference, which ended on July 15, unveiled reform plans to improve the financial sector's capabilities to serve the real economy while guarding against systemic risk.

The conference decided a new financial stability and development committee will be set up under the State Council, with the central bank taking on a bigger role in managing financial-market risk.