Branch offices of the People s Bank of China (PBC) should deliver moderately loose monetary policy and give top priority to maintaining stable and relatively rapid economic growth in their financial micromanagement in 2009, asked Liu Shiyu, Deputy Governor of the PBC, at a working conference held on February 26 and 27 in Chengdu, Sichuan province.
During the 2009 Working Conference on Money and Credit Supply and Financial Markets, which was attended by Deputy Governor Liu Shiyu and Assistant Governor Li Dongrong of the PBC and joined by Deputy Governor Chen Wenhua of Sichuan province, PBC officials from the Headquarters and branch offices reported on PBC s work in money and credit supply and financial markets in the past year, analyzed the changing situations and new challenges, and outlined the work plan for 2009.
Reviewing the work in 2008, Deputy Governor Liu Shiyu said that the PBC appropriately adjusted the orientation, focus and intensity of monetary policy in a more farsighted, targeted and effective manner, strengthened the guiding role of credit policy, promoted the development of financial markets, and contributed to stable and relatively rapid economic growth. At the same time, based on practical situations within their respective jurisdictions, PBC branch offices carried out money and credit policies with improved efficiency.
In 2008, the PBC timely adjusted the monetary policy and used a mix of monetary policy tools to control money and credit aggregate in line with the changing economic situation both at home and abroad. It improved the lending policies to promote economic restructuring and expand domestic demand, and pushed for product innovation and institutional capacity building in the financial market.
The Deputy Governor noted that, given the great uncertainty in the domestic and global economy, the PBC is facing great challenges in fulfilling its mandates on money and credit supply and financial market stability in 2009. He asked PBC branch offices to implement moderately loose monetary policy and give top priority to maintaining stable and relatively rapid economic growth, and emphasized that they should ensure reasonable and stable credit growth and fend off risks in the financial market.
PBC branch offices should enhance their analysis and research capabilities, said Deputy Governor Liu at the conference. Drawing on their advantages, they should further improve the preciseness of their analyses and forecasts. They should strengthen the management of monetary policy tools, including credit supply, reserve requirement, central bank lending, rediscount, interest rates and window guidance, and improve financial services to the agricultural sector to support the building of a new socialist countryside. The PBC branches were encouraged to beef up credit policy guidance to support the efforts to expand domestic demand, improve people s livelihood and restructure the economy. They were urged to promote the development of the financial markets while guarding against market risks. In addition, they should give adequate attention to effective communication with financial institutions, local governments and the public to enhance their understanding of relevant policies and to properly steer market expectations.
On behalf of the Sichuan provincial government, Deputy Governor Chen Wenhua expressed gratitude to the PBC for its contribution to disaster relief and reconstruction efforts after the devastating earthquake through policy support and financial services. Chen also hoped that the PBC will continue to support economic and social development in Sichuan.
In concluding the conference, Li Dongrong, Assistant Governor of the PBC, reminded the participants of the challenging tasks ahead, pointing out that 2009 is a critical year for macroeconomic management. With a keen sense of urgency and responsibility, PBC branch offices should identify and address potential problems, and concretely implement policies and measures aimed to render financial support to economic growth so as to ensure effective and fruitful work in credit supply and financial market stability in 2009.
