China central bank pledges policy fine-tuning, yuan flexibility

BEIJING (Reuters) - China's central bank said on Friday that it will fine tune policy in a pre-emptive and timely way, as the economy still faces downward pressure despite signs of steadying.

The People's Bank of China will stick to its long-standing prudent stance and keep the yuan currency (CNY=CFXS) basically stable, the bank said in its first-quarter monetary policy implementation report.

The central bank said it would create "an appropriate monetary and financial environment for structural adjustments, transformation and upgrading", and take measures to ward off systemic financial risks.

The downward pressure still exists on China's economy due to weak global economy and domestic structural adjustments, the central bank said, adding that it would closely watch changes in consumer prices.

The central bank also pledged to let the market play a bigger role in determining the yuan exchange rate and improve the currency's two-way flexibility.

China's economic growth slowed to 6.7 percent in the first quarter - the weakest since the global financial crisis, but economic activity picked up in March after a slew of policy steps, including six interest rate cuts since late 2014.

(Reporting by Kevin Yao and Michael Martina; Editing by Robert Birsel and Robin Pomeroy)