China’s central bank sets economy guidelines, local debt risks

A worker walks across a construction site in the Central Business District, ahead of the opening of the National People’s Congress (NPC) in Beijing, China, Feb 28, 2023. REUTERS/Thomas Peter/File photo

BEIJING  -China’s central bank on Monday said it will fend off systemic risks to the economy and guide financial institutions to resolve local debt risks, laying out general guidelines for the country’s economic and financial policies.

In its third quarter policy implementation report, the central bank said monetary policy would be forceful and targeted, and that it would better support expanding domestic demand.

The government has launched several policies over the past few months, seeking to energize an economy pressured by a struggling property sector, local government debt risks, slow global growth and geopolitical tensions.

READ: China to choose fiscal muscle over big reforms to revive economy

“Supply and demand dynamics in the property market have greatly changed,” the bank said in its report, adding there was urgency for faster economic transformation.

The central bank reiterated that it expects to achieve about 5 percent growth this year.

READ: China expects economy to growth by slightly more than 5% in 2023

The yuan has come under pressure recently and the central said it would keep the exchange rate “basically stable” and strive to foster a sound monetary and financial environment.