Money

China to continue prudent monetary policy

(Xinhua)
Updated: 2011-06-04 10:52

BEIJING - The People's Bank of China, the country's central bank, reiterated Friday it would continue to implement a prudent monetary policy this year.

The central bank will measure the financial sector's support for the country's economy by the indicator -- total social financing, it said in an abstract of 2011 China Financial Stability Report posted on its website on Friday.

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Total social financing includes all funds raised by entities in the real economy during a certain period of time, such as loans of local and foreign currencies, entrusted loans, trust loans, bank acceptance bills, corporate bonds, equity financing, foreign direct investment and foreign debt.

The central bank began to publish the quarterly total social financing figure this year. The indicator gauges the overall pace of fundraising to help the central bank judge how much liquidity is in the financial system. The concept was first introduced by the central bank in December last year.

The central bank will increase the scale of direct financing this year and meanwhile ensure financial stability, according to the statement.

Direct financing usually refers to fundraising in the stock and bond markets.