China to keep monetary policy neutral: Central bank official

Yi Gang, deputy governor of the People's Bank of China, at a press conference in Hangzhou, Zhejiang province, September 1, 2016. [Photo/Xinhua]

BEIJING - China should keep its monetary policy stable and neutral, a Chinese central bank official said Wednesday.

Yi Gang, deputy governor of the People's Bank of China, made the remarks at the annual meeting of Chinese Economists 50 Forum (CE50) when responding to questions on China's monetary policy.

Top officials have set China's monetary policy in 2017 as "prudent and neutral" to keep appropriate liquidity levels and avoid large injections, as the government tries to maintain stable growth while avoiding risks.

Yi said that keeping monetary policy neutral meant not being too tight or loose.

Chinese banks extended 2.03 trillion yuan ($295 billion) of new yuan loans in January, doubling from a month earlier, a level that Yi described as "very appropriate."

In open market operations earlier this month, the central bank raised the lending rates to banks by 10 basis points, a move widely interpreted as a shift towards a more neutral monetary policy.

China's GDP grew 6.7 percent year on year in 2016, the lowest in nearly three decades, but within the government's target range.

Founded nearly two decades ago, the CE50 is a civil academic organization and think tank that brings together around 50 prominent Chinese economists, including officials and academics.