(Yicai Global) May 13 -- China will maintain consistency and stability through the continued implementation of the prudent and neutral monetary policy, per a first-quarter report released by the People's Bank of China (PBOC).
PBOC said that it will push ahead exchange rate reform, intensify efforts to let the market decide exchange rates, make the yuan's exchange rates more flexible, progress the internalization of the yuan, and maintain the yuan's stable status in the global monetary system. Yuan exchange rates will be kept stable at a reasonable equilibrium level.
PBOC said it will manage market expectations, strike a balance between deleveraging and maintaining steady liquidity, and provide a secure liquidity environment for stabilizing growth, adjusting structure, deleveraging, suppressing bubbles and preventing risks.
PBOC said that increases in interest rates on the monetary market since the start of last year have been caused by changes in supply and demand and should not be deemed interest rate hikes. More flexible market interest rates can help deleverage, suppress bubbles and mitigate risk.
PBOC said that its shrinking liabilities do not necessarily indicate monetary policy is being tightened and people should not compare PBOC's practices with those made by foreign counterparts. PBOC increased its liabilities last month, data shows.
Deleveraging was mentioned nine times in the report, marking an increased number of referenced from last year's fourth-quarter report.
PBOC said that it will emphasize reducing the corporate leverage ratio and supporting market-oriented and law-based debt-to-equity swaps to decrease the total leverage ratio.