PBoC pledges it will ‘firmly guard’ financial system, guide yuan

Beijing: China’s central bank signalled it’s focusing more on preventing systematic financial risks, reiterating the pledge announced after a meeting of top economic officials last month, and said it will do more to manage market expectations for the currency.

The People’s Bank of China (PBoC) said it will support financial market stability and dropped last year’s language saying officials will encourage financial innovation, according to a statement released Friday after a meeting led by deputy governor Yi Gang. Governor Zhou Xiaochuan also spoke at the annual gathering for planning policy in the coming year.

The central bank is adding more emphasis on risk prevention and will “firmly guard the bottom line” in avoiding any systematic risk, according to the statement. Policy makers also said they will “actively guide and stabilize market expectations” for the yuan and that they will offer more financial support on cutting overcapacity in the steel and coal industries.

The statement echoed another released after the Communist Party’s annual Central Economic Work Conference last month, when President Xi Jinping and other top leaders said preventing and controlling financial risk to avoid asset bubbles will be a priority. They also said they plan prudent and neutral monetary policy and proactive fiscal policy this year. Bloomberg