PBOC promises better communications with investors

It’s to keep market liquidity and interest rates stable.

The People's Bank of China said in its quarterly policy report it hopes to anchor investors' near-term expectations on market interest rates and liquidity.

China's short-term interest rates shot to as high as 30 percent in late June after the central bank refused to increase money supply to ease a cash crunch partly caused by a seasonal spike in demand for funds.

The unnerving market reaction led some to criticize PBOC for not saying earlier it would support the market to avoid bank failures, a pledge the central bank made after the height of the cash squeeze.

PBOC said it will manage and adjust liquidity in the banking system while increasing communication with the market and the public to stabilize expectations.

"We will guide financial institutions to operate in stable manner and urge them to improve their liquidity and risk management and internal controls," it said.

The central bank also reiterated that strict controls on China's property market would remain in place, and did not signal any changes in its policy stance.