(Yicai Global) Jan. 5 -- The People’s Bank of China has put enhancing financial reform, regulating the platform economy and promoting the digital Chinese yuan at the top of its agenda for 2023.

This year, the PBOC will focus on upgrading the financial system and the platform economy as well as piloting the digital yuan, which is already being tried out in 26 areas across the country, keeping the Chinese yuan exchange rate stable after a 8.6 percent slump last year and ensuring the healthy development of the real estate market, it said.

It will continue to implement a prudent monetary policy, maintain reasonable liquidity, match the growth of broad money supply and social financing with nominal economic growth, and take measures to reduce the fundraising costs of market players in 2023, the central bank said during an online conference where it announced its work priorities for the year.

The PBOC will hike financial support for domestic demand and supply systems, support recovery and expansion of consumption as well as the construction of key infrastructure and major projects, it said.

Last year, the PBOC cut the reserve requirement ratio twice, releasing over CNY1 trillion (USD145.2 billion) of liquidity into the open markets, turned over more than CNY1.1 trillion in surplus profits to the country's central budget ahead of schedule, lowered the benchmark loan prime rate to reduce financing costs for companies and kept the yuan exchange rate steady, it said.

The PBOC is likely to lower the five-year LPR this month and will conduct targeted RRR cuts and other structural easing tools this year, said Li Chao, chief economist at Zheshang Securities. It will alternate between a prudent and slightly loose monetary policy as well as a prudent and neutral policy to stabilize growth, employment, finances, the exchange rate and balance of international payments.

Releasing effective demand and guiding positive expectations are key to revitalizing the entire real estate chain, said Wen Bin, chief economist at China Minsheng Bank. The property sector will recover faster with policy support.

The digital economy has great advantages but also faces huge challenges, said Huang Yiping, deputy dean of the National School of Development at Peking University. Regulation of the platform economy should pay attention to “contestability” to see if there are any monopolies, avoid unrecoverable costs in companies, and lower the threshold to enter and withdraw from the market, he said.

Editor: Kim Taylor