The central bank of China announced that it would employ aggressive and focused monetary policy to better stimulate domestic demand while warding off systemic dangers to the economy.

The bank outlined the overall direction of financial policy in its quarterly policy implementation report and stated that it will make use of all available monetary measures to guarantee adequate liquidity.

“Prudent monetary policy should be precise and forceful, with greater emphasis on cross-cyclical and countercyclical adjustments, enriching the monetary policy toolbox,” the bank said.

Additionally, the bank promised to maintain “reasonably stable” prices, improve the stability of financial assistance for the real economy, and “further unblock the monetary policy transmission mechanism”.

The central bank stated that although China’s economy is expanding, it still faces difficulties like an uneven global economic recovery and an insecure basis for domestic economic recovery.

Beijing has implemented a number of policy initiatives this year in an effort to support the weak post-pandemic recovery in the face of geopolitical tensions, a poor global growth rate, dangers associated with local government debt, and a sustained downturn in the real estate market.

The bank stated that it would advise financial institutions on how to handle local debt concerns and that a quicker pace of economic development was necessary.

“Supply and demand dynamics in the property market have greatly changed,” the central bank said.

As the yuan has been under pressure on the foreign exchange market this year, the bank said it will keep the currency “basically stable” and work to promote a stable monetary and financial environment.

It restated its expectation to increase by about 5% this year.

(Adapted from Investing.com)