The monetary policy committee of China's central bank indicated at its third quarter meeting that China should continue its moderately loose monetary policy and that the currency exchange rate should be more flexible.
The domestic and international financial situation should be observed closely, the Chinese central bank said following the meeting, adding that China should use various monetary tools to secure increase of credit and to optimize credit structure.
The bank continued by saying that the world economy is recovering, but there are structural problems and risks. The operation of the Chinese economy is generally good and the economy is developing in the expected direction. Nevertheless, the bank said it is hard to manage inflationary expectations, to maintain stable economic development, to adjust economic structure and to change the economic development mode.
Before the National Day holiday, the central bank increased the liquidity of the banking system. In September its total net issuance of currency was a record breaking RMB 330 billion.