China's central bank says the country saw reasonable credit growth and market liquidity in 2012, but is cautioning inflationary risks going forward. In its fourth quarter monetary policy report just released, the PBOC also says it will continue with its prudent monetary policy stance. Let's get the details.
The People's Bank of China says the economy kept a stable growth rate in 2012, with consumer demand remaining flat and fixed asset investment relatively fast-growing.
The PBOC also says its raft of policies unleashed months ago, especially last year's rate cuts, helped maintain reasonable credit growth and market liquidity.
It says China's M2, the broad system that measures money supply, reached 97.4 trillion yuan by the end of 2012. That's 13.8 percent higher from the year ago period.
The report also mentions the several steps taken last year to make interest rates more market-oriented. In the meantime, the PBOC says the yuan's effective exchange rate has gone up by 2.22 percent, and the Chinese currency became more flexible.
Looking forward, the PBOC says China is likely to see stronger growth momentum, and that it will continue its prudent monetary policy, while using a combination of monetary tools to keep reasonable market liquidity.
It also highlights warding off inflation risks will be a main priority, while warning on external uncertainties, such as a slow global recovery and major economies' monetary easing.
The Chinese central bank also vows to push forward financial market reforms, beefing up regulations and ensuring market stability.
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