CHINA’S central bank will accurately and effectively implement prudent monetary policy, pay more attention to counter-cyclical adjustments and make efforts to expand domestic demand and boost confidence, it said on Wednesday (Apr 3).

The People’s Bank of China will support banks to replenish capital and guide financial institutions to increase medium- and long-term loans to the manufacturing industry, it said in a statement issued after a quarterly meeting of its monetary policy committee.

Economic data over the January-February period and a factory owners survey for March suggested a bright start to the year for the world’s second-biggest economy and offered relief to Chinese policymakers seeking to rekindle the economy after it failed to post a sustainable recovery after reopening from lockdowns.

China’s economic operation continues an upward trend, “but it still faces challenges of inadequacy of effective demand and weak social expectations,” the statement said, citing the meeting.

The central bank will “step up the implementation strength of introduced monetary policy” and keep liquidity reasonably ample.

The PBOC will improve a “mild rise” in prices and maintain the prices at a reasonable level, according to the statement, as the economy faces deflationary pressure.

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The bank also said it will guide major banks to play the role of the main force to provide financial services to the real economy. REUTERS