The yuan has fallen sharply since mid-October and slid Thursday after a media report said authorities were considering letting it depreciate in response to the threat of a trade war with the US.

China’s regulators pledged to boost efforts to stabilise the housing and equity markets, as well as conduct more effective fiscal policies, in the wake of a meeting of top leaders that called for greater stimulus.

The government will promote the recovery of the property market through measures such as increasing demand and controlling the supply of land for new development, China News Service reported, citing Dong Jianguo, a vice minister at the housing ministry. He spoke at a conference on Saturday.

The China Securities Regulatory Commission (CSRC) said it will enhance market monitoring for futures and spot trading, and strengthen supervision of margin trading, derivatives and quantitative trading, according to a statement on its website. 

The Ministry of Finance (MOF) said it will implement more effective and sustained fiscal policies next year, as well as improve macroeconomic regulations. The government will also increase the issuance and usage of local government special bonds, and expand their investment areas, according to a statement on its website. 

The comments come after officials led by president Xi Jinping vowed to raise the fiscal deficit target next year following a two-day huddle of the Central Economic Work Conference (CEWC) in Beijing. For only the second time in at least a decade, they made “lifting consumption vigorously” and stimulating overall domestic demand their top priority. 

China’s struggling economy has rebounded modestly in recent weeks on the back of more government support, with signs of improvement in consumption and factory activity. But overall confidence remains frail because policies haven’t been strong enough to free the economy from deflation. 

In a sign of the challenges facing policymakers, China’s credit expansion unexpectedly slowed in November, figures showed Friday. Loans extended to the real economy, which exclude those issued to financial institutions, fell to the lowest for the month of November since 2009. That offset elevated government bond issuance to drag down overall credit growth.

More easing is on the cards. China will cut interest rates and the reserve requirement ratio in a timely manner next year, the 21st Century Business Herald reported on Saturday, citing Wang Xin, director of the research bureau under the People’s Bank of China (PBOC).

The central bank will increase the intensity of monetary and credit supply, Wang said at an event on Saturday, according to the report. Financing conditions for the real economy will also be relaxed further, it cited Wang as saying. The comments came days after the Politburo pledged to embrace a “moderately loose” monetary policy in 2025.

The prospect of greater easing is triggering a rush of funds into government bonds. On Friday, the yield on China’s 10-year bonds fell to a record low of 1.77%, while longer-tenor yields also tumbled. By contrast, the CSI 300 Index of stocks slumped 2.4%, its worst drop in three weeks.

The central bank will also improve how it manages exchange rate expectations and guard against any shocks next year, according to a senior official.

The PBOC will “step up expectation management on exchange rates and vigorously respond to external shocks,” the head of the monetary policy department Zou Lan told state media in an interview published Friday. In addition, the central bank will “resolutely prevent risks of overshooting in the exchange rate.” 

The yuan has fallen sharply since mid-October and slid Thursday after a media report said authorities were considering letting it depreciate in response to the threat of a trade war with the US.