The move is aimed at boosting China's economic growth, said Dai Genyou, head of PBOC's Monetary Policy Department.

To maintain currency stability, the central bank will continue its firm monetary policy, Dai noted at the "China Finance Forum 2000" in Beijing.

Fundamental changes will take place in China's economic system and growth way in the 10th Five-Year Plan period, Dai said, adding that the national economy is to enjoy an average growth rate of 7 per cent.

"The PBOC will try to keep balance of economic growth and financial risk, and at the same time increase the money supply moderately,'' he said. Dai emphasized that monetary policy should avoid deflation as well as inflation.

Statistics showed that China is now enjoying an easy money supply, rising currency fluidity and a normal drop of savings deposit during the first half year, he said, noting this is what PBOC favours when market price did not climb.

(China Daily)