(Yicai Global) Dec. 28 -- Next year, China’s monetary policy will continue to be prudent as well as flexible and moderate, to protect against and resolve financial risks, the People’s Bank of China said at its annual work conference, regarded as a wind vane for the financial sector.

The central bank will utilize a variety of monetary policy tools to enhance the stability of total credit growth, strengthen support for the real economy and maintain a balance between the increase in money supply and economic growth, the PBOC said yesterday.

The PBOC will help reduce companies’ overall financing costs, encourage the financial system to benefit the real economy and maintain the basic stability of the Chinese yuan exchange rate, it added.

Financial support for reasonable housing needs should be strengthened, said Ma Hong, senior researcher at the Zhixin Investment Research Institute. For instance, banks should speed up the issuance of mortgages and real estate development loans, lower mortgage rates for first-time homebuyers and enhance financial support for affordable rented accommodation.

Other countries’ monetary policies will not significantly affect China’s policy agenda next year, said Ming Ming, deputy director of CITIC Securities Research Institute. There is still room for further cuts of the reserve requirement ratio and interest rates, he added.

The disposal of key institutions’ debt should be done in a stable and orderly manner, the PBOC said. Local governments should strengthen the supervision of internet-based companies, implement prudent management of real estate finance and support the healthy development of the property sector.

Editors: Zhang Yushuo, Kim Taylor