BEIJING, Sept. 27 (Xinhua) -- China's central bank said it would step up efforts in smoothing out the transmission of monetary policy and take market-oriented reform measures to cut real interest rates.

Efforts should also be made to lead financial institutions to increase their support for the real economy, especially for the micro and small enterprises and the private sector, the People's Bank of China said in a statement after a quarterly monetary policy committee meeting.

The Chinese yuan exchange rate is generally stable and posting a stronger capability to deal with external challenges. Initial success was also made in curbing the rapid growth of the macro leverage rate, said the bank.

Structural adjustments in the country's economy and financial sector have undergone positive changes, but the country faces increasing economic downward pressure and external uncertainties, said the bank.

It vows to intensify its counter-cyclical adjustments, deepen reform of the financial system and further expand two-way opening-up in its financial sector.

The bank said to keep the prudent monetary policy "neither too loose nor too tight" and refrain from using a deluge of stimuli.

The meeting stresses the use of a variety of monetary policy instruments to maintain reasonably sufficient liquidity, deepen market-oriented reform of interest rates and keep the yuan's exchange rate basically stable at a reasonable and balanced level.

It also called for guarding against and defusing financial risks, stabilizing market expectations and sticking to the bottom line of avoiding systemic financial risks. Enditem

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