The People's Bank of China (PBOC) announced on Tuesday that it would not halt its prudent monetary policy.
Rather, the country's central bank would strike a balance between too tight and too loose of a policy, as revealed by its fourth-quarter monetary policy report.
The Global Times reported that the PBOC would sustain its policy of "continuity and stability." At the same time, it would form a financial environment that is appropriate for the country's current economic restructuring efforts. It would also make sure that the financial environment is conducive to the country's upgrading efforts.
The PBOC will utilize several monetary policy tools to account for market liquidity and stabilize the market based on what is happening both domestically and internationally.
The central bank would also make sure that the rural economy can be boosted by more credit resources. It recognizes the importance of both small and micro-firms. The bank believes that these small entrepreneurial activities lend huge support for the real economy and would therefore assist them in their development and growth.
Latest figures on China's consumer inflation dipped to the lowest level in more than five years. The figures are significant, and worrying, since it is a main tool of inflationary measure. As the economy falters in light of these negative developments, most hope that the bank would recommend an easing in monetary policies. However, the bank, in this report, dashed these hopes, but promised to be more balanced.
The Chinese economy is faced with a lot of old and new problems. Aggravating the situation is that economic performance and macro-policies in various regions diverge from each other, making it harder to manage.