The People’s Bank of China concluded its quarterly meeting of the monetary policy committee Monday by announcing it would maintain a prudent monetary policy with more flexibility, reported state news agency Xinhua.

The policy committee said it would use a wide combination of monetary tools to maintain liquidity in the market and to ensure a reasonable growth of money supply and social financing.

The central bank said it would raise the ratio of direct financing to lower the fund-raising cost of enterprises. Through direct financing, enterprises can get funds from the capital market by issuing shares or bonds, rather than from costly intermediary institutions like banks or insurers, said Xinhua.

The PBOC said it will continue to push interest rate liberalization and the reform on the formation mechanism of the yuan exchange rate, and will keep the exchange rate basically stable at a reasonable and balanced level.

The meeting came after the policy-setting Central Economic Work Conference, during which Chinese leaders agreed that the country’s prudent monetary policy needs to be more flexible so as to create appropriate monetary conditions for structural reforms next year.

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