China's central bank said on Thursday it will comprehensively utilize various monetary policy tools, maintain reasonable and ample liquidity and ensure moderate and steady growth of money supply and credit.

The People's Bank of China reaffirmed its goal of keeping money supply growth and total social financing largely in line with nominal economic growth. And it will also flexibly conduct open market operations, keep liquidity in the banking system and ensure money market interest rates remain stable, the PBOC said in its second-quarter monetary policy report.

When it comes to concerns over China's disinflationary pressures, the central bank said China's economy is not witnessing deflation, as the economy continues to recover, and the broad money supply is growing relatively fast.

"Currently, there is no deflation (in China's economy)," the PBOC said in the report, adding that it is not expecting inflation or deflation to become a problem for China.

Data from the National Bureau of Statistics showed that the consumer price index, a main gauge of inflation, fell 0.3 percent year-on-year in July following a flat reading in June. The decline marks the first drop since February 2021.

The central bank said China's consumer inflation is likely to gradually recover from August, and it is expecting to see a "U-shaped" recovery in consumer prices this year.

Looking ahead, the central bank said it will keep financing of the property sector stable as well as increase the financial support for rental housing, transformation of villages in cities and the construction of government-subsidized housing.

Further, the PBOC will continue to keep the yuan basically stable and guard against the risk of large exchange rate fluctuations.