PBoC: Will guide reasonable credit growth

• Prudent monetary policy should be flexible, moderate, precise and effective.
• Will guide reasonable creditr growth.
• Will lower firms’ financing and household credit costs steadily.
• Will promote the steady decline in the cost of comprehensive social financing.
• Will maintain fundamental stability of Yuan exchange rate at a reasonable equilibrium level.
• Will implement measures to prevent and resolve risks in key aread such as real estate, local government debt and small and medium-sized financial institutions.
• Will also keep liquidity reasonably ample.
• Will prevent the formation and self-reinforcement of unilateral uniform expectations, guard against risk of exchange rate overshooting.
• Will conduct stress tests on financial institutions’ bond asset holdings risk exposure and prevent forex risks.
• Will gradually increase the purchase and sale of Treasury bonds in the central bank’s open market operations.
• Will strengthen the authority of policy rates, deliver clearer adjustment target signals of interest rates to market.
• Will strengthen makret expectation guidance and focus on changes in long-term bond yields as economy rebound.
• Will strengthen guidance of market expectations, pay attention to changes in long-term bond yields during economic recovery.
• Will increase construction and supply of affordable housing to meet rigid housing needs of wage earners.
• Will satisfy demand for working-class groups, support various improvements to housing demand for households in rural and urban areas.

This article was written by Giuseppe Dellamotta at www.forexlive.com.