Central bank says yuan to remain stable in 2006

China's central bank on Tuesday said yuan will stay stable in 2006, while American manufacturers allege the Chinese currency is "undervalued" by as much as 40 percent.

The value of the Chinese currency will stand at a reasonable and balanced level, the People's Bank of China (PBOC) reiterated in a report.

China to improve interest rate formation mechanism

China's central bank on Tuesday said China will improve the interest rate formation mechanism by developing a market benchmark system in order to increase the bank's ability to influence market interest rates.

Two of the major monetary policies for 2006 are to gradually promote market-oriented interest rate reform and improve the formation mechanism of interest rates, the bank's report said.

Central bank: current domestic situation conducive to economic growth

The current domestic situation is conducive to the stable and healthy development of China's economy, the People's Bank of China (PBOC), the central bank, said on Tuesday.

This is the first year of China's 11th Five-Year Development Program period, as well as the last year of China's interim period after joining the World Trade Organization (WTO), said the bank in a report on monetary policy.

Central bank: uncertainty exists over China's future price trend

Uncertainties still exist over China's future price trend, the People's Bank of China, the central bank, said on Tuesday.

The probable investment rebound will lead to rising prices of raw materials, fuel and power, which will be further exacerbated by the ongoing reform of China's resource-pricing systems concerning fuel, water, power, natural gas and coal, said the bank in a report on monetary policy.

Payment imbalance may be hurdle

While the Chinese economy faces a favourable domestic environment for stable growth this year, challenges such as imbalances in international payments are still ahead, said the People's Bank of China.

The nation's central bank said that rapid increases in household income and residents' intentions to upgrade TVs and other goods will help boost domestic spending.

Renminbi reform 'did not disrupt economy'

China's exchange rate reform launched last year has not disrupted the economic stability as some worried, the country's central bank said Tuesday.

The widely watched reform has also helped weaken expectations for further appreciation of the Chinese currency, renminbi, the People's Bank of China (PBOC) said in its 2005 fourth-quarter monetary policy report released yesterday.