Prudent monetary policy to stay
Updated: 2013-06-29 03:45
By WU YIYAO and XIE YU in Shanghai (China Daily)
Zhou Xiaochuan, governor of the People's Bank of China, speaks at the Lujiazui Forum in Shanghai on Friday. He said the central bank will direct banks to release "reasonable lending" and will adjust liquidity at appropriate times. LIU XIN / FOR CHINA DAILY
Central bank to speed up opening of capital account, global use of yuan
China's will continue to implement prudent monetary policies, but will conduct preemptive adjustments and fine-tuning in an appropriate way when necessary, according to Zhou Xiaochuan, the governor of the People's Bank of China.
The head of the country's central bank said that it will work with other departments to guide financial institutions to maintain reasonable lending levels, and will use multiple tools to adjust liquidity and keep the market stable.
Speaking at the Lujiazui Forum in Shanghai on Friday, in his first public comments on the issue, Zhou said: "The PBOC will use all sorts of instruments and measures to adjust the overall liquidity level, so as to ensure the overall stability of the market."
He added the bank would ensure the "normal operation" of the economy.
There has been anxiety in the market that tightening credit conditions could spread into the broader economy, with some Chinese companies reportedly running short of cash to settle suppliers' bills.
Zhou said the central bank would guide financial institutions on maintaining reasonable credit growth while arranging their debts and maturity structures properly, to support the structural adjustment and upgrading of the real economy.
He said that the PBOC would continue actively pushing the opening up of the renminbi market, and that China plans more currency swap deals with other central banks, in the pursuit of more commercial banks starting to operate offshore yuan clearing businesses.
China will also speed up the opening of its capital account, though the process will be flexible, he added.
Shanghai is pushing hard to become a major financial hub, and its mayor, Yang Xiong said the city will strive to become a global renminbi center by the end of 2015.
In 2012, the country's yuan-denominated cross-border settlements totaled 500 billion yuan ($81 billion), a 50 percent year-on-year growth, added Yang.
Li Lihui, president of the Bank of China, said that simplified benchmark interest rates for deposits and lending and a more significant role for the Shanghai Interbank Offered Rate, or Shibor, in the global market will also help the currency's internationalization.
Current cross-border renminbi-denominated settlements are usually used in trade between China and neighboring countries, and Li added that it may take another 15 years for the renminbi to become one of world's major currencies.