The Currency Policy Committee of the People's Bank of China affirmed the effects of the reform of the RMB's exchange rate at its recent quarterly regular meeting.

According to a news release of the central bank on Monday, the meeting said that with the stable operation of the new exchange rate forming mechanism in the past two months, China's financial situation is good and the expectation for a larger appreciation range is shrinking.

In the next phase, the central bank will further improve the managed floating RMB exchange rate mechanism to keep the RMB exchange rate basically stable at a reasonable and balanced level, while developing the financial market and the foreign exchange market, said the meeting.

According to the meeting, China's economic growth slowed in reaction to the macro-economic control move by the central government.

But the inner momentum for stronger economic growth still exists and there are still such problems as overheating investment in some industries, tension in coal, electricity, oil supply and transportation as well as a comparatively larger favorable trade balance, said the meeting.

The major mission for the current economic work is to harmonize various macro-economic policies, expand the consuming demand, improve the economic and international trade structure, enhance economic growth efficiency and realize sustainable economic growth and a basically stable price level, said the meeting.

In the next phase, the bank will continue a stable currency policy to further improve the efficiency of macro-financial control. While strengthening the control moves, it aims to make the market play a more important role in adjusting demand and supply. It will improve the interest rate policy while enhancing financial reforms in financing and currency policy, said the meeting.

(Xinhua News Agency September 20, 2005)