China to maintain stable monetary policies
China will continue to maintain its tight monetary policies amidst high inflation pressure, said the People’s Bank of China (PBOC) in its second-quarter monetary report.
The central bank said the priorities of the country’s macroeconomic controls are still to maintain a stable and fast growth of the economy, and to curb inflation.
Meanwhile, PBOC will ease the financing difficulties faced by small and medium-sized enterprises (SMEs) and the agricultural sector by guiding the flow of credit. It will also use a combination of policy tools to soak up interbank liquidity, and keep a close eye on the risk posed by inflation.
The report warned that the gloomy U.S. economy could last a long period, which will certainly have a negative impact worldwide.
The PBOC said that external demand will continue to weaken, but the momentum of the first-half domestic expansion will continue into the second half of 2008.
The trade surplus will remain high, according to the report.
The central bank also said in the report that it will maintain the balance and stability of the Chinese currency at a reasonable level, whilst adding flexibility to the exchange rate policy.
Tags: central-bank, inflation, Peoples-Bank-of-China