More importance will be attached to adopting a certain level of flexibility in monetary policy this year, Yi Gang, deputy governor of the People's Bank of China (PBOC), China's central bank, said on Tuesday, according to a report by the Xinhua News Agency. [Special coverage]
Yi is a member of the Chinese People's Political Consultative Conference National Committee.
The PBOC held that China's current monetary policy is "prudent and relatively accommodative," according to its statement during a press conference ahead of the G20 Finance Ministers and Central Bank Governors Meeting in Shanghai on February 26-27.
The PBOC noted in the statement that China will continue to implement a prudent monetary policy in a flexible and appropriate manner, so as to keep liquidity at adequate levels and maintain the proper growth of credit.
However, the market has raised questions as to whether a "prudent and relatively accommodative policy" is different from a "prudent monetary policy", the latter being referred to by PBOC Governor Zhou Xiaochuan during the PBOC press conference.
Yi said on Tuesday that the two expressions do not contradict each other. He said China's monetary policy orientation will remain unchanged and be "prudent" this year.
However, he also noted that a certain level of flexibility will be applied to this year's monetary policy, meaning that the government will fine-tune the policy at the appropriate time and to an appropriate degree.
According to Yi, in 2016, more credit will be given to key supportive departments for structural reforms. For example, the PBOC will provide strong support to key projects such as urban renovation via the pledged supplementary lending (PSL) facility.
PSL is a type of supplementary lending instrument backed by collateral, which will help inject liquidity into the market.
The government will focus on strengthening structural reforms, particularly from the supply side, so as to strike a balance among economic growth, structural transition and risk prevention, the PBOC said.
