The central bank may continue to ease policy while stabilizing the exchange rate market

　　With the yuan falling to its lowest level since 2007, the People's Bank of China (PBoC) said it would take steps to avoid excessive volatility in the currency, suggesting the central bank may continue to ease monetary policy while stabilizing the pace of currency depreciation.

　　According to the People's Bank of China's quarterly monetary policy report released on Thursday, the central bank highlighted challenges facing the economy, including a weak outlook for household income, low confidence in private investment and growing pressure on local government finances. The central bank said it would "intensify macroeconomic policy adjustments" and reiterated that it would implement a targeted and strong monetary policy and use various tools to ensure that liquidity remains reasonably adequate. It also said that it will optimize its real estate policy at an appropriate time.

　　Raymond Yang, chief economist for Greater China at ANZ, said: "The wording suggests that more monetary easing is likely following this week's surprise rate cut. We believe there will be more interest rate action or a cut in the reserve requirement ratio. There may also be more support measures for the property sector."

　　This week, the central bank unexpectedly cut interest rates by 15 basis points as a range of key indicators pointed to weak conditions and a build-up of risks in the property market.