China to stay on 'normal' policy path

PBOC report: Interest rates to be kept at low levels to support small firms

China will maintain a normal monetary policy for as long as possible and keep interest rates at a relatively low level to support small business financing and maintain ample liquidity in the system, the People's Bank of China, the central bank, said.

The PBOC statement in its quarterly monetary policy report will help remove concerns that a "normalized policy" would lead to tight financial conditions, as the economic recovery has been faster than expected, experts said on Friday.

The central bank has also reiterated its pledge to make the prudent monetary policy more targeted and flexible, and guide the actual interest rates in financial markets to steadily float around the relatively lower policy rates.