The Monetary Policy Committee of the PBC held the 4th quarterly meeting of 2005 in Beijing days ago.
It was agreed that the economy had witnessed rapid and highly efficient growth in 2005 with inflation staying under control and economic vitality enhanced. Under the guidance of the CPC Central Committee and the State Council, the PBC continued to pursue sound monetary policy and adopted various monetary policy instruments to appropriately adjust money and credit growth. The overall performance offinancial sector remained sound, the new exchange rate regime has been running smoothly, and the flexibility of RMB exchange rate has gradually improved.
The Committee conducted an in-depth analysis of current economic and financial situation bothat home and abroad. It was agreed that, the economy was continuing to grow in asteady and relatively fast way with enhanced stability and coordination.However, problems still exist in economic operations including pressures on are bound in fixed-asset investment growth and imbalances in international balance of payments. It was concurred that efforts should be made to better coordinate macroeconomic policies, boost consumer demand, foster economic and international trade restructuring, promote transformation of the economic growth pattern so as to achieve sustained growth as well as price stability.
In discussing monetary policy stance and policy measures to be adopted in the coming period,the Committee consented that sound monetary policy should be continued. While ensuring continuity and stability at aggregate level, preemptive andfine-tuning measures should be strengthened. Market-based interest rate reformpolicies should be continuously carried out, and commercial banks and rural credit cooperatives should be encouraged to enhance their capabilities in risk pricing and liability management. Market should play a fundamental role in determining the exchange rate so as to keep the RMB exchange rate basically stable at an adaptive and equilibrium level. Measures should be taken to promote institutional building of the financial market, encourage innovation ofnew financial products and instruments and develop financial derivatives. Building of foreign exchange market should be accelerated and foreign exchange management should be improved so as to provide better services to theenterprises, households and financial institutions to hedge risks. Efforts should also be made to foster the reform of financial sector, promote the sound development of capital market, expand channels for direct financing and enhance the efficiency of monetary policy transmission.
Themeeting was chaired by Mr. Zhou Xiaochuan, Governor of the PBC and Chairman ofthe Monetary Policy Committee, and attended by other Committee members including Mr. You Quan, Mr. Zhu Zhixin, Mr. Li Yong, Ms. Wu Xiaoling, Mr. SuNing, Mr. Li Deshui, Ms. Hu Xiaolian, Mr. Liu Mingkang, Mr. Shang Fulin, Mr. WuDingfu, and Mr. Yu Yongding. Mr. Guo Shuqing provided written comments. Presidents of the PBC Jinan Branch and Guangzhou Branch also attended the meeting.
