China's central bank vows to take more steps to support virus-hit economy

China has cut several of its key rates in recent weeks, including the benchmark lending rate on Thursday, and has urged banks to give cheap loans and payment relief to companies which have been hardest hit by the outbreak.

Analysts widely expect further monetary and fiscal support measures in coming weeks, while stressing the key near-term policy challenge will be finding ways to keep companies afloat until demand recovers.

Benchmark deposit rates will also be adjusted at an appropriate time, Liu said. Speculation had been growing that a cut was being considered, which would lower banks' funding costs and give them more incentive to lower rates they charge for loans.

Liu said that the epidemic's impact on China's economy would be limited, and that Beijing would strive to meet economic and social development targets this year.

Chen Yulu, another vice central bank governor, said the country is fully confident it beat the epidemic, state media reported on Saturday.

"We believe that after this epidemic is over, pent-up demand for consumption and investment will be fully released, and China's economy will rebound swiftly," Chen said.

China's economic growth may show a sharp slowdown in the first quarter, probably dipping to 3% or even lower from 6% in the previous quarter - which was the weakest pace in nearly 30 years, economists estimated.

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Some forecasters also say there is a growing risk the economy could contract in the first quarter from the previous three months, as factories have been slower to resume production than expected due to shortages of staff and raw materials.

The central bank also is closely monitoring consumer prices, which could be disturbed by the virus epidemic, Liu said.

Seasonal factors and the virus' impact were behind the flat M1 money supply, or cash in circulation plus corporate demand deposits, in January from a year earlier, Liu said.

Liu also said China's economic fundamentals were sound, adding it had ample foreign currency reserves to support its yuan currency.