(Yicai Global) Nov. 20 -- China's central bank will continue to strengthen counter-cyclical adjustment and reinforce credit support to the real economy, Governor Yi Gang reiterated at a meeting yesterday with representatives of six banks.

This is the second time in four days that the People's Bank of China has signaled to the market that it will bolster counter-cyclical adjustment, or measures to stabilize the economy.

Yi also stressed the need to continue to maintain the M2 broad money supply along with the growth rate of social financing and nominal growth rate of gross domestic product, while promoting the operation of the economy in a rational manner.

The smooth operation of macroeconomics and finance still faces challenges and downward pressure on the economy continues to mount amid an ongoing squeeze on local social credit, the gathering noted.

At the meeting were the heads of big state-backed lenders Industrial and Commercial Bank, Agricultural Bank, China Construction Bank and the chiefs of mixed-ownership CITIC Bank, Shanghai Pudong Development Bank and Industrial Bank.

The market expected the central bank today to trim its new benchmark lending rate, the loan prime rate. It cut the one-year LPR by 5 basis points to 4.15 percent from 4.20 percent last month, and lowered the five-year LPR by the same to 4.80 percent from 4.85 percent.

Yesterday, the PBOC also lowered the seven-day reverse repurchase rate by 5 basis points in a move expected to further reduce companies' real interest rates by further lowering financial institutions' marginal capital costs. The central bank cut the mid-term lending facility rate by 5 basis points for the first time in four years on Nov. 5.

Editor: Ben Armour