PBC (People's Bank of China) Monetary Policy Committee's regular meeting for the third quarter of 2005 was held recently in Beijing. The meeting is of the opinion that current financial operation is generally good. Reform on exchange rate formation mechanism is being implemented steadily. RMB exchange rate has realized two-way floating and expected RMB long-term appreciation is showing signs of shrinking.

The meeting discussed the orientation and measures of monetary policy for the next stage and believed in continuing steady monetary policy and further increasing the foresightedness, scientificity and effectiveness of financial macro controls.

While maintaining continuity and stability in general pre-adjustment and fine tuning should be strengthened and emphasis should be given to the regulating role of the market. Continue to carry out and implement the policy of interest rate marketization; study and improve the interest rate formation and transmission mechanism.

Further perfect managed floating exchange rate system; keep the basic stability of the RMB exchange rate at a reasonable and balanced level.

Vigorously push ahead the construction of financial market and innovation of financial tools; speed up development of foreign exchange market; continue to improve foreign exchange supervision; guide businesses and citizens in improving capability to manage exchange rate risks.

Accelerate financial reform; facilitate the coordinated development of direct financing and indirect financing; raise the transmission efficiency of monetary policy.

By People's Daily Online