China will implement monetary policy in a flexible and precise way and strike a balance between economic recovery and risk prevention, the central bank has said.

In a statement released after a quarterly meeting of its monetary policy committee, the People's Bank of China (PBOC) pledged efforts to keep the economy running within an appropriate range and ensure that it reaches a higher level of equilibrium during the course of the recovery.

Prudent monetary policy, the PBOC said should stay flexible, precise, reasonable and moderate, keeping macro leverage ratio basically stable and liquidity at a reasonable and ample level.

The central bank said it will strengthen efforts to facilitate inclusive finance and guide financial institutions to increase support for sectors such as innovation, small and micro enterprises, as well as green development.

It pledged to deepen market-oriented reform of exchange rates, increase the yuan's flexibility while keeping the currency's exchange rate basically stable at a reasonable and balanced level.

Work will be done to establish a mechanism that allows the financial system to effectively support the real economy, promote high-level two-way financial opening and improve the country's management and risk control capabilities, said the statement.

The PBOC, it continued, will set up tools to boost coal emission reduction and improve the green financial system to help achieve the carbon peak and carbon neutrality targets.

The central bank will also strengthen coordination of international macroeconomic policies and prevent external shocks, according to the statement.

"The U.S. Federal Reserve's liquidity tightening, like the quantitative easing tapering, may be realized before the end of this year, which will have a certain impact on the exchange rate and capital flows of emerging markets based on past experience," said Jimmy Zhu, chief strategist at Fullerton Research.

"The PBOC will pay more attention to maintaining a stable exchange rate," Zhu added. "However, as China's economic recovery is still in a strong position, with the PMI continuously above 50 and the spread of China-U.S. bond yields being relatively large, it is expected that the PBOC will not make too many policy adjustments."

(With input from Xinhua)