(Yicai Global) April 26 -- China plans to make zero changes to its current monetary policy, as it does not want to flood the market or bring about a liquidity drought, according to the vice-governor of the People's Bank of China.

The central bank's public market operations are not an indication of an upcoming looser policy, Liu Guoqiang said at a regular press briefing held by the cabinet's information office yesterday. Short term liquidity fluctuates every day for a range of reasons, and the central bank needs to use its tools to make quick adjustments.

Likewise, a lack of open market operations is not an indication of tighter policy, he continued, hoping to quash market speculation that OMOs or a lack thereof meant the central bank was gearing up for a policy shift.

The PBOC has never had a loose monetary policy and is not making it tighter now, added Sun Guofeng, director of the bank's monetary policy department. Economic and financial situations at home and abroad are very complex and there are many uncertainties, Sun said, adding that a sound monetary policy would ensure timely, micro adjustments based on economic growth and price changes.

The central bank plans to conduct targeted medium-term lending facilities for small and micro companies and private businesses in the fourth week of the first month of every quarter, Sun said, explaining that it takes time to measure demand and collect relevant data.

The PBOC created the TMLF tool in December to nudge financial institutions into offering support for small, micro and private businesses. It has used the tool twice to date, in January and in April.

Editor: James Boynton