China will maintain a prudent monetary policy in 2007 for rapid and stable economic, says, Zhou Xiaochuan, governor, People's Bank of China, the country's central bank.
The central bank will strengthen foreign exchange management this year and push forward financial reforms to maintain the stability of the financial system, he stated, adding that the central bank had worked towards restricting the growth of monetary credit to a reasonable level last year and had sped up the reform of state-owned commercial banks.
Last year, the central bank improved the yuan exchange rate formation mechanism and kept the yuan exchange rate floating in a disciplined manner within a reasonable range, Zhou said.
China has been facing constant criticism from its trading partners, the US and the EU, that the country keeps its currency deliberately low to boost its global trade.
In the first 11 months of 2006, Chinese banks lent 2.97 trillion yuan ($380.76), far higher than the government's target of 2.5 trillion yuan and the total government lending for the entire year is expected to be the highest since 2003.
According to the monetary policy commission of People's Bank of China, in the first few months of 2007, China should restrict loan growth to a reasonable pace and optimise loan structure.