China pledged yesterday to stick with its "moderately loose" monetary policy to consolidate an economic recovery that is not yet solid and that is haunted by weak external demand.

The People's Bank of China, the nation's central bank, said at its quarterly monetary policy meeting that it will continue to ensure reasonable growth in loans and direct more financing toward the agriculture sector and small and medium-sized companies (SMEs).

Lending to industries that are polluting, energy-intensive or overcapacity will be strictly controlled, the bank said.