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China central bank head says policy needs to selectively support growth, curb risks

China's monetary policy needs to focus on supporting economic growth in a targeted way while reducing financial risks, People's Bank of China (PBOC) Governor Yi Gang said in a speech made at a closed-door session at the China Development Forum on Saturday. His comments were published by the PBOC on Sunday.

"Monetary policy needs to strike a balance between supporting economic growth and preventing risks," he said.

"China's macro leverage ratio is basically stable. We should provide positive incentives for economic entities and restrain the breeding and accumulation of financial risks."

There is still ample room to maneuver the monetary policy, which needs to create a suitable environment for deepening financial reform and opening up, he noted.

Yi said China's monetary policy should focus on targeted support for key areas and weak links in the economy.

Policymakers have pledged to support job-creating small firms that have been hit harder by the coronavirus pandemic.

China's broad money supply growth of about 10 percent at present basically matches nominal economic growth, Yi said.

"China's monetary policy is in a normal range and has room to provide liquidity and appropriate interest rate levels," Yi said.


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