BEIJING (Reuters) -China will step up implementation of its prudent monetary policy and stabilise employment and prices in an effort to consolidate and improve an upward trend of the economy amid rising downside risks from the global economy, its central bank on Wednesday.
Beijing will keep liquidity ample, guide commercial banks to expand medium- and long-term lending and maintain reasonable growth in the money supply and scale of social financing, the People’s Bank of China (PBoC) said in its third-quarter monetary policy implementation report.
“We will attach great importance to the potential possibility of future inflation, especially to the changes in the supply side,” the PBoC added, vowing to keep price levels basically stable.
The world’s second-largest economy is facing a series of headwinds including protracted COVID-19 restrictions, global recession risks and a property downturn.
The economy suffered a broad slowdown in October amid COVID-19 lockdowns as factory output grew more slowly than expected, retail sales fell for the first time in five months and a property contraction intensified.
The downbeat data poses a challenge for Chinese policymakers as they steer the $17 trillion dollar economy through choppy waters, following recent moves to ease some COVID curbs and give financial support to the struggling property sector.
Regarding the distressed property sector, the central bank reiterated that “housing is for living in, not for speculation” and said it will not use real estate as a short-term stimulus to the economy.
“(We) will speed up the use of special loans for housing completion and appropriately increase lending as necessary, and guide commercial banks to provide matched financing support.”
On the yuan’s weakening against U.S. dollar, it said China would enhance the flexibility of the yuan exchange rate and keep the currency stable within a reasonable level.
(Reporting by Liangping Gao, Ellen Zhang, Ryan Woo and Beijing newsroom; Editing by Alison Williams and Mark Heinrich)