THE central bank said Friday trade disputes, geopolitics and monetary policies of major economies are the key uncertainties in its economic outlook even as the global economy picks up speed.

“The global economy is expected to continue to pick up, but trade frictions, geopolitics and the normalization of monetary policies in major economics pose uncertainties,” the People’s Bank of China, the country’s central bank, said on its website.

China, the world’s second-largest economy, will continue to implement prudent and neutral monetary policy, while ensuring reasonable growth in credit and social financing, the central bank said.

The country’s banking regulator also said over the weekend that China’s stable financial system provides firm financial support for the real economy.

An official with the China Banking and Insurance Regulatory Commission said the banking and insurance sectors are joining the effort to eliminate ineffective supply and foster new drivers for growth to improve the quality and benefits of serving the real economy.

As of the end of May, loans provided by banking institutions in Chinese yuan and foreign currency increased by 12 percent year on year to 133 trillion yuan (US$19.5 trillion). The growth of lending to small and micro enterprises was at a faster pace of 14.2 percent, according to the commission.

Chinese regulators continue to focus and make progress on de-risking the financial sector with coordinated measures, said Moody’s in a recent report.

“The result is reflected in our adjusted total social financing series, growth of which is now more aligned with nominal GDP growth — a sign that the build-up of economy-wide leverage has been further contained,” said Michael Taylor, a Moody’s managing director and chief credit officer for Asia-Pacific.

The central bank said last week that it expects liquidity in the banking system to increase further from current levels.

The central bank injected 100 billion yuan via reverse bond repurchase agreements in open market operations Thursday.

The cash injection was to counter factors including maturing reverse repos in order to stabilize cash conditions at the end of June, the central bank said in a statement on its website.

In the second quarter of the year, business confidence among Chinese entrepreneurs continued to improve, the central bank also said. The entrepreneur confidence index climbed for the ninth straight quarter, rising to 75.8 from 74.2 in the first quarter.(SD-Agencies)