China's central bank pledges to adjust policy to support growth

BEIJING (Reuters) - China's central bank said on Thursday it would adjust its monetary policy at the appropriate time to support the economy, amid rising external headwinds.

"Currently, the adverse effects caused by changes in the external environment have deepened, and challenges such as insufficient domestic demand and numerous potential risks still exist," the People's Bank of China said in its fourth-quarter monetary policy implementation report.

The central bank added it would make comprehensive use of its monetary policy toolkit, including interest rates and its bank reserve requirement ratio, and "adjust the intensity and pace of policy measures based on domestic and international economic and financial conditions."

It said it would keep liquidity ample, promote a reasonable rebound in prices and keep the yuan exchange rate basically stable at a "reasonable and balanced" level.

Chinese policymakers have rolled out a blitz of stimulus measures since September, including interest rate cuts, cash injections and steps to tackle hidden debt of local governments. They have promised to unveil more steps this year to support the economy.

Faced with deflationary pressures and mounting headwinds to already stuttering growth, Chinese leaders in December ditched their 14-year-old "prudent" monetary policy stance for a "moderately loose" posture.

(Reporting by Beijing Newsroom and Kevin Yao; Editing by Sharon Singleton and Christina Fincher)

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