SHANGHAI/BEIJING (REUTERS) - China's central bank said on Sunday that it would keep policy steady with timely fine-tuning to cope with economic uncertainties while forging ahead with yuan and interest rate reforms.

China's economic performance and inflation remained stable but there would be "difficulties and challenges" ahead, the People's Bank of China said in a statement after a regular meeting of its monetary policy committee.

While maintaining prudent monetary policy, the central bank will make pre-emptive and timely policy fine-tuning to help stabilise economic growth, it said.

The central bank also pledged to push forward market-oriented interest rate reforms and improve the currency regime while keeping the yuan exchange rate basically stable.

Beijing has stepped up efforts to head off a sharp economic slowdown by quickening railway investment and public housing construction and introducing measures to help smaller companies.

Recent economic data has shown some of the impact of those policies, with factory output in August hitting a 17-month high and retail sales growing at their fastest pace this year.