China central bank will prioritize monetary policy stability in 2021 -Xinhua

FILE PHOTO: The Chinese national flag flies at half-mast at the headquarters of the People’s Bank of China, the central bank (PBOC), as China holds a national mourning for those who died of the coronavirus disease (COVID-19), on the Qingming tomb-sweeping festival in Beijing, China April 4, 2020. REUTERS/Carlos Garcia Rawlins

BEIJING (Reuters) – China will prioritize monetary policy stability in 2021, the Xinhua news agency on Friday quoted central bank governor Yi Gang as saying.

The central bank will use various policy tools to keep liquidity reasonably ample, and ensure that the growth of broad money supply and total social financing basically matches nominal economic growth, Yi was quoted as saying.

China will provide more financial support to small firms, technological innovation and green development, Yi added.

Yi’s remarks were in line with the central bank’s stance.

The bank said on Wednesday it would make its monetary policy flexible, targeted and appropriate in 2021, focusing on supporting small firms.

The central bank has rolled out a raft of measures, including cuts in interest rates and reserve ratios since early-2020 to support the virus-hit economy.

But it has shifted to a steadier stance in recent months and kept its benchmark lending rate, the loan prime rate, unchanged since May.

Any steps to exit stimulus measures will have a small impact on the economy this year because the central bank had refrained from adopting zero or negative interest rates, Yi said.

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