China will maintain a prudent monetary policy in 2007, said
central bank governor Zhou Xiaochuan in his New Year address.
The central bank will strengthen foreign exchange management
this year and push forward financial reforms to maintain the
stability of the financial system, said Zhou.
He said the bank had striven to restrict the growth of monetary
credit to a reasonable level last year and had sped up the reform
of state-owned commercial banks.
According to the People's Bank of China (PBC), Chinese banks
lent 2.97 trillion yuan (US$380.76 billion) in the first 11 months
last year, far above the government's target of 2.5 trillion yuan.
Total new loans for 2006 will reach the highest level since
2003.
The monetary policy commission of the PBC said at a recent
meeting that in the first few months of 2007, China should restrict
loan growth to a reasonable pace and optimize loan structure.
Last year, the central bank improved the yuan exchange rate
formation mechanism and kept the yuan exchange rate floating in a
disciplined manner within a reasonable range, said Zhou.
The value of the Renminbi, or Chinese yuan, has risen nearly
3.86 percent since China's reform of the exchange rate system on
July 21, 2005.
A Xinhua Economic Analysis Report released on Monday predicts
the exchange rate of the Chinese currency will appreciate by some 5
percent against the US dollar in 2007 to reach 7.44 yuan.
Monetary policy aims to stabilize RMB prices but also to expand
domestic consumption, prevent investment from growing too fast, and
promote a more balanced international payment situation, according
to the PBC commission.
(Xinhua News Agency?January 4, 2007)