Central bank pledges to key reforms

BEIJING: China's central bank on Sunday pledged to forge ahead with key financial reforms, shore up foreign exchange management and provide more credit for the country's cash-starved small firms.

The People's Bank of China will "seize an important strategic opportunity" to push reform of major financial sectors and "strengthen and improve" foreign exchange management.

The statement was issued after a meeting of officials to study a speech by President Hu Jintao at a gathering marking the 90th anniversary of the Communist Party of China (CPC).

The central bank will make monetary policy more "targeted, flexible and efficient", it said.

Separately, the State Administration of Foreign Exchange (SAFE) said in a statement that it would push changes to make the yuan fully convertible in a "steady and orderly" way while stepping up monitoring on "abnormal" cross-border capital flows.

It also pledged to shore up management of its foreign exchange reserves the world's largest, topping $3 trillion and improve the country's balance of payments.

The central bank, keen to rein in inflation, which is running near three-year highs, has raised banks' reserve requirements six times and lifted interest rates twice so far this year.

The central bank pledged to enhance financial support for small businesses hit by credit curbs.

Wang told bankers and officials during a visit to the northern city of Shijiazhuang that they must take "more forceful measures" to address the funding woes facing small businesses.

Banks must "unswervingly enhance funding support" for small firms, which are vital for jobs and social stability, Wang said.

Wang acknowledged there were difficulties in reaching the governments economic and social development goals for 2011 and striking a balance between prompting economic development, structural adjustments and controlling inflation.

Copyright Reuters, 2011