Dai Xianglong, president of the People's Bank of China (PBOC) noted recently that effective measures would be carried out to encourage the development of industrial investment fund and various types of direct financing.

Measures would also be carried out to promote enterprises to increase their capital amount and optimize capital structure. Being in line with the development of macro-economy, ratio of reserves against deposit, and deposit and loan rates should remain unchanged.

He deemed that the stable currency policy should continue to be carried out. Measures of currency policy must be put into effect. Besides, more support should be provided to medium- and small-sized enterprises, and hi-tech enterprises. The development of industrial investment fund and various types of direct financing should be accelerated.

He also denoted that in order to carry out the interest rate magnetization reform steadily, the interest rates should be set according to the individual loans, capital balance, and interest rate management. Before carrying out in all credit associations it may be tried out in small area. The range of interest rate float in big cities would be widened. The interest rate of general deposit would be controlled, while that of large-scale loans would be flexible.

The modern banking system should be established. PBOC will support state-owned commercial banks to reform. The finance industry would be more open to the international market, and more importance should be attached to the relation between domestic currency and foreign currency, interest rates and foreign exchange rate.

(China Daily)