(Yicai Global) Jan. 15 -- Ant Group has set up a working party to rectify its business practices with the guidance of China’s central bank while maintaining normal operations, according to a vice governor of the People's Bank of China.

The financial authorities are keeping a close eye on the fintech giant and will report on progress in due course, Chen Yulu told a press conference today.

The Hangzhou-based company’s USD35 billion initial public offering, which was set to be the world's largest stock offering, was halted in November as regulators began reining in online lending.

China is cracking down on financial sector risks, including reining in peer-to-peer lending platforms and other high-risk finance institutions, as well as scaling back shadow banking activities, Chen said. 

Monetary Policy

Price stability is the central goal of China's monetary policy, Chen said. The core consumer price index, which excludes food and energy, is still at a low level, but is expected to bounce back with a sustained and stable recovery in China's economy and the gradual rebound of domestic consumption, he said.

Core consumer prices rose 0.4 percent in December from a year earlier, down 0.1 point from November, according to official data released on Jan. 11.

Prices are likely to keep rising moderately this year, and CPI growth will moderate in the second half, Chen said.

Stability is the PBOC’s top priority, Chen said, adding that the growth rates of the M2 money supply and social financing may be a little higher or lower than nominal economic growth in accordance with the economic situation and the needs of economic governance.

The central bank has been keen to ensure reasonable growth of loans from commercial banks to property developers, and has encouraged a flow of more financial resources to the manufacturing sector as well as small and micro businesses, said Zou Lan, who heads its financial market department.

Property loans grew at a slower pace than other loans last year for the first time in eight years, with the proportion of new real estate loans down to 28 percent from 44.8 percent of overall loans in 2016, he added. 

Exchange Rate

The direction of the yuan exchange rate depends on various factors such as the domestic and overseas economic situations, the international balance of payments and changes in the global forex market, said Sun Guofeng, head of the PBOC's department of monetary policy.

Overall, the yuan will neither appreciate nor depreciate, Sun said, adding that it will remain basically stable at an appropriate and balanced level. 

Editor: Tom Litting