China central bank reiterates New Year promise of stable policy

Reuters

BEIJING (Reuters) - China's central bank reiterated its promise of stable, prudent and consistent monetary policy in 2014 on Tuesday, while pushing reforms of the financial system as it looks to support growth in the world's second-largest economy.

In a new year message on the bank's website, www.pbc.gov.cn, People's Bank of China Governor Zhou Xiaochuan said monetary policy would be more pre-emptive and coordinated next year.

His comments supplement earlier ones from the bank after its fourth-quarter monetary policy committee meeting that China will achieve reasonable growth in credit and social financing while keeping appropriate liquidity to support growth.

China's leaders are looking for steady growth in the economy as they push through one of the country's most ambitious reform agendas, looking to transform the economy into one driven by consumers rather than the traditional investment and exports.

But the central bank has not found its part in the transformation easy, having tried to cut the cash in the system to rein in bank lending in a move that caused credit crunches in June and December.

The central bank said separately on Tuesday it had added 70 billion yuan ($11.6 billion) worth of three-day bills into China's money markets on November 18 via short-term liquidity operations.

Also on Tuesday, the central bank announced rules for financial institutions issuing asset-backed securities, saying they must keep at least 5 percent of the securities themselves to prevent risk.

(Reporting by Aileen Wang and Kevin Yao; Editing by Nick Macfie)

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