China reiterates prudent monetary policy will continue

China's central bank has reiterated that it will continue to implement a prudent monetary policy in 2012 while making it more targeted, flexible and foresighted in order to support stable and healthy economic growth.

The central bank must learn lessons from the global financial crisis to better handle the intensity, pace and focus of financial macro-control, Zhou Xiaochuan, governor of the People's Bank of China (PBOC), said in a statement posted on the bank's website Wednesday.

Multiple monetary tools should be used to optimize the credit structure, beef up support for key areas and weak links in the economy and maintain reasonable social financing growth, a broad measure of funds raised by entities in the real economy, Zhou said.

The remarks came after Chinese Premier Wen Jiabao called on banks to take concrete action in better serving the real economy.

Financial institutions should enhance support for enterprises while improving management in order to control the capital bubble and prevent risks, Wen said during his tour to eastern Jiangsu province on Sunday and Monday.

Zhou once again urged the central bank to properly handle the relationships between maintaining growth, economic restructuring and managing inflationary expectations.

China's economic growth has slowed all year to hit 9.1 percent in the third quarter but remains above the global average.

Earlier this month, the PBOC cut banks' reserve requirement ratio (RRR) by 50 basis points -- the first decrease in three years -- to ease a liquidity strain as inflation softened.

To rein in runaway inflation, the PBOC has hiked banks' RRR six times and the benchmark interest rate three times this year.

Zhou also called for further improving the formation mechanism of the yuan's exchange rate and enhancing the management of foreign exchange reserves.

Efforts should be made to deepen reforms of the financial system and steadily advance reforms to leave interest rates to market forces, he said.