BEIJING - China's cabinet decided Wednesday to further reduce the real financing interest rates for small and micro firms.

China will stick to a prudent monetary policy which will be eased or tightened to the right degree, while maintaining reasonably sufficient liquidity to ensure that the loan's real interest rates for small and micro firms will be lowered, according to a statement released after an executive meeting of the State Council chaired by Premier Li Keqiang.

The market quotation interest rate mechanism for commercial banks' loans will be improved, while medium, small and micro firms will enjoy more support in financing by bonds and other means.

Some cities will be encouraged to conduct a three-year-long reform pilot in improving financial services for private, small and micro firms, according to the statement.