China's regulators have effectively used its policy toolbox to provide financial support for the country's economic recovery and growth, and will continue to do so for the rest of the year, said a senior central bank official on Friday.

The country's economy has been showing a positive recovery trend but authorities would not be resting on their laurels, Ruan Jianhong, director-general of the Statistics and Analysis Department of the People's Bank of China (PBOC), told a forum at the ongoing 2022 China International Fair for Trade in Services (CIFTIS), where financial services was a key highlight.

"At present, the Chinese economy continues to recover and is showing new economic and social achievements. At the same time, it is also facing some challenges," said Ruan. "We need to give greater emphasis to the supportive role of financial services to consolidate economic recovery and development."

China has maintained sufficient liquidity in the banking system in 2022, she said, adding that regulators will continue to maintain liquidity and further deepen financial reform and opening-up.

She noted the PBOC's lowering of the reserve required ratios (RRR) by 25 basis points in April, and several monetary measures to reduce comprehensive financing costs and appropriately increased liquidity.

Central bank data shows that the M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 12 percent from previous year at the end of July. Financing costs for market entities have continued to fall while interest rates for loans have fallen to 4.29 percent, down 0.34 percentage points year on year.

China's regulators have stepped up financial support in some key areas as well this year, Ruan added. 

The central bank and State Administration of Foreign Exchange rolled out 23 measures in April to enhance financial services for businesses and people affected by the COVID-19 pandemic.

Policymakers also continued to improve the supportive financial services for micro and small businesses. The balance of the country's inclusive loans to small and micro businesses stood at 21.77 trillion yuan ($3.15 trillion) by the end of June, up 22.6 percent year on year, according to the central bank.

As China's financial markets continued its high-level opening-up, the financial sector has become more effective in serving the real economy, said Ruan. 

In July, the PBOC and the Hong Kong Special Administrative Region's regulators announced the Swap Connect scheme, which is expected to be officially launched in a few months. 

The Swap Connect is a new mutual access program between the Chinese mainland and Hong Kong's interbank interest rate swap markets, which is set to encourage more foreign investors to participate in China's financial markets and invest in yuan-denominated products.