BEIJING (Reuters) - China is willing to keep its monetary policy flexible to be able to withstand the possible economic shocks, but will not resort to excessive stimulus steps to support growth.
The Central Bank is trying to maintain liquidity to support the economy and protect it from the effects of structural reforms, but officials cautioned against undue weakening, which could increase the pressure on the currency.
Yi Gang, deputy governor of the bank, said at the briefing that he expects that China will achieve its goal of economic growth this year. The government has set a goal of economic growth at the level of 6.5% -7% in 2016 based on the data that point to a further weakening in the beginning of the year.
The second largest economy in the world increased on an annual basis by 6.9% in 2015 - the slowest pace in 25 years. Under the banner of "prudent" monetary policy, the Central Bank reduced interest rates six times since November 2014, and also reduced the amount of cash that banks must hold as reserves.
Analysts expect a further easing of monetary policy in the coming months, although the government can direct more efforts to increase fiscal spending and tax cuts to support growth.
Zhou said that China's property market is facing pressure from the reduction of stocks and this should allow local authorities to play a huge role in the stabilization of the market. The housing market in China, which accounts for about 15% of the economy began to stabilize in major cities last year, helped by a number of government measures. Recovery of the housing sector remains uneven across the country. Small towns face huge inventory of unsold homes. In some cities, the authorities have announced the introduction of measures to combat this problem.
In order to stimulate the housing market, the Chinese government reduced payments in the past month for those who are the first and the second time to buy the house and lowered some operating taxes for some buyers.
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