Zheng Shanjie, director of the National Development and Reform Commission, Lan Fo'an, minister of finance, Wang Wentao, minister of commerce, Pan Gongsheng, governor of the People's Bank of China, and Wu Qing, chairman of the China Securities Regulatory Commission, attend a press conference on economy for the second session of the 14th National People's Congress (NPC) in Beijing, capital of China, March 6, 2024. [Photo/Xinhua]

China has a rich monetary toolbox and there is still ample policy headroom, Pan Gongsheng, governor of the People's Bank of China (PBOC), said Wednesday.

"We will pay more attention to striking a balance between the short term and the long term, between seeking steady growth and preventing risks, and between internal equilibrium and external equilibrium in our monetary policy regulation," Pan said at a press conference held on the sidelines of the ongoing session of the national legislature.

The central bank will intensify countercyclical and cross-cycle adjustments, strive to boost confidence, stabilize expectations and prices, and create a sound monetary and financial environment for economic development, he said.

At present, the average reserve requirement ratio (RRR) of China's entire banking sector is 7 percent and there is still room for further RRR cuts, according to Pan.

The PBOC will use a combination of monetary policy tools to step up countercyclical adjustments and maintain adequate liquidity at a proper level, he noted.

Pan said the central bank will particularly take into account maintaining price stability and promoting a moderate recovery of prices when mulling monetary policy, and work for a steady decline in overall financing costs while ensuring a healthy balance sheet of the banking sector.

"We will further enhance the effectiveness of monetary policy in promoting economic restructuring, transformation and upgrading, and in replacing old growth drivers with new ones," he said, adding that the central bank will also act to keep the RMB exchange rate generally stable at an adaptive and balanced level.

The PBOC will pursue a prudent monetary policy in a flexible, appropriate, targeted and effective way, adhere to the major role in serving the real economy, intensify macro regulation, step up both aggregate and structural adjustments, consolidate the momentum of economic recovery, and promote high-quality development, Pan said.