China central bank promises more policy support for economy

FILE PHOTO: COVID-19 outbreak in Shanghai

BEIJING (Reuters) – China’s central bank said on Friday it will step up implementation of its “prudent” monetary policy to support the economy hurt by the COVID-19 pandemic, keeping liquidity reasonably ample and maintaining credit growth.

The People’s Bank of China will keep growth of money supply and total social financing basically in line with nominal economic growth, the central bank said in a statement after a quarterly meeting of its monetary policy committee.

Chinese leaders have pledged to focus on stabilising the economy in 2023 and step up policy adjustments to cushion the impact from a surge in COVID infections at a time when a weakening global economy is hurting exports.

“We will step up the implementation of prudent monetary policy, which will be precise and forceful,” the central bank said.

“We need to work hard to stabilise growth, employment and prices. We need to support the expansion of domestic demand and provide more forceful support for the real economy.”

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The central bank will lower companies’ comprehensive financing costs and consumers’ credit cost, it said, adding that it will guide financial institutions to increase medium- to long-term loans to the manufacturing sector.

The central bank will enhance the yuan’s flexibility while keeping the currency basically stable, it said.

China will push forward restructurings, mergers and acquisitions of property firms and guide platform companies to conduct regulated and healthy financial businesses, it added

(Reporting by Beijing newsroom and Kevin Yao; Editing by Alex Richardson and Frances Kerry)