Central Bank's Lu Lei Emphasizes Monetary and Financial Stability as Core Objectives

At a press conference held by the State Council Information Office, Lu Lei, Deputy Governor of the People's Bank of China, stated that monetary stability and financial stability have always been the central objectives of the central bank. It is necessary to establish an efficient and stable framework, including a dual-pillar framework of the monetary policy system and the macro-prudential management system. A scientific and robust monetary policy system should be constructed, covering a comprehensive macro-prudential management system, to effectively manage counter-cyclical and cross-cyclical adjustments, ensuring that the growth of social financing and the money supply aligns with the economic growth and the expected targets for the overall price level. The mechanisms for market-based interest rate formation, regulation, and transmission need to be improved, allowing the market to play a decisive role in exchange rate formation, enhancing the flexibility of the RMB exchange rate, and maintaining basic stability of the RMB exchange rate at a reasonable and balanced level. Furthermore, it is essential to enhance the communication of monetary policy and expectation management, expand the macro-prudential and financial stability functions of the central bank, broaden the coverage of macro-prudential management, enrich the tools for macro-prudential management, strengthen the monitoring and evaluation mechanisms for macro-prudential management, and enhance the construction of the financial stability guarantee system to effectively mitigate financial risks in key areas.