The People’s Bank of China will continue to maintain “prudent” monetary policy in 2015, keeping credit growth stable while having its hands free to fine-tune policy when necessary, the regulator said in an online statement on Friday.
However, the central bank said it would quicken the pace of market-oriented interest rate reform and push forward on increasing yuan convertibility in the capital account.
The People’s Bank of China (PBOC) also said it would take steps to prevent systemic risks in the financial sector, a sign that regulators will maintain pressure on off-balance sheet lending and shadow banking.
China has made a series of moves to clamp down on shadow banking in recent months, including tighter regulations on the usage of bond market and interbank assets for refinancing.
The announcement reiterates the PBOC’s commitment to stable monetary policy, even as speculation mounts that Beijing will have to take steps to boost growth and fend off deflationary pressures, in particular loosening monetary policy by cutting reserve requirement ratios (RRR) for banks.
via Reuters 
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