China's financial system will keep liquidity ample and make interest concessions to boost the real economy but should consider timely policy withdrawal in advance, Yi Gang, the country's central bank governor, said on Thursday.

Amid the impact of COVID-19, China's financial markets remain stable overall and the country's economic fundamentals have been improving, Yi told the Lujiazui Forum 2020 in Shanghai.

China will keep liquidity ample in the second half of the year. New loans are likely to hit 20 trillion yuan (2.83 trillion U.S. dollars) this year, up from 16.81 trillion yuan in 2019, and total social financing could increase by 30 trillion yuan, he said.

The economy has been recovering steadily after shrinking 6.8 percent in the first quarter, he said.

The People's Bank of China has guided a continuous drop in interest rates through market-based reform, Yi said, noting financial institutions will make interest concessions and expedite fee cuts to business as high as 1.5 trillion yuan.

The fee cuts target was proposed at the State Council's executive meeting chaired by Premier Li Keqiang on Wednesday as a specific goal for a series of efforts to help firms survive the pandemic, including bringing down the lending and corporate bond rates, making concessional rate loans, deferring loan repayment for micro, small and medium enterprises and supporting the issuance of uncollateralized loans to small and micro companies, as well as reducing fee-charging from banks, according to the conference note on the State Council's website.

The conference indicated that the market's concern of monetary tightening in the past several weeks seems unfounded and a reserve requirement ratio cut is likely to come, Lu Ting, chief China economist of Nomura, said in a note released on Thursday.

But these financial support policies are phased for the pandemic period, Yi said, "We should pay attention to the hangover of the policies and consider a timely withdrawal in advance."