(Yicai) Dec. 17 -- China's central bank will implement a moderately loose monetary policy next year while taking measures to prevent financial risks and deepen the financial reform and opening-up.

The People's Bank of China will flexibly employ various policy tools, including timely paring the reserve requirement ratio and interest rates, to maintain reasonable market liquidity, according to a meeting of its party committee yesterday. It aims to strengthen monetary transmission mechanisms and guide financial institutions to meet effective financing demand from the real economy while lowering overall financing costs.

The PBOC pledged to enhance the resilience of the forex market and maintain the basic stability of the Chinese yuan exchange rate at a reasonable and balanced level.

Key areas for financial support to the real economy were also outlined at the meeting. The PBOC will guide commercial banks in optimizing their credit structure and using structural monetary policy tools to support tech innovation, green development, consumption revival, and stable foreign trade, as well as promote the property market's steady development.

Regarding financial risk prevention, the PBOC will strengthen macroprudential management and innovate financial tools to maintain market stability. It will support risk resolution of local small and medium-sized financial institutions and help defuse local government financing vehicle debt risks.

The PBOC will continue to deepen financial reform and opening-up by promoting institutional opening of financial markets and developing multi-tier bond markets. It will steadily advance the internationalization of the yuan, enhance the competitiveness of the Cross-Border Interbank Payment System, and support Shanghai and Hong Kong as international financial centers.

The party committee also stressed the importance of maintaining stable financial market operations and ensuring secure financial infrastructure during the year-end period.

The policy signals indicate a more proactive monetary stance next year, with practical measures to prevent financial risks and deepen reforms, which should help boost market confidence and support the economic recovery, according to analysts.

Editor: Martin Kadiev