* China c.bank to maintain prudent monetary policy
* Eyes on shadow banking risks
* Will keep deleveraging, fending off risks
* Will limit funds flowing to speculative housing purchases (Adds details, background)
BEIJING, May 12 (Reuters) - China's central bank said on Friday it will maintain a prudent and neutral monetary policy and keep liquidity basically stable, reinforcing its intent to dampen speculative investment while keeping the economy adequately funded.
The People's Bank of China (PBOC) said it will also strengthen oversight to prevent risks in shadow banking, including asset management products, according to its first-quarter monetary policy implementation report.
The PBOC said it will continue to push for deleveraging to fend off financial risks, but with appropriate "speed and rhythm" to stabilise market expectations.
It pledged to provide necessary liquidity support for "reasonable growth of credit" -- a potential response to market fears of a liquidity squeeze.
Indeed, the PBOC showed its willingness to provide longer-term credit into the market on Friday as it moved to inject fresh funds through a medium-term lending facility.
China's top leadership has identified curtailing financial risks as a top priority this year. Regulators have stepped up efforts to clamp down on irregularities and to close potential loopholes, with China's fast-growing $7.7 trillion shadow banking sector in regulatory focus.
The PBOC also said it will restrict credit flowing into speculative housing purchases, as China continues its battle against dangerous price bubbles in the biggest cities.
China's banking regulator also said on Friday it is paying special attention to real estate loans to small and medium-sized developers, and lending in smaller cities, amid worries of property-related financial risks.
Official data on Friday showed China's banks unexpectedly extended more credit in April than in the previous month, but household loans fell in a sign authorities are walking a tight rope as they try to tamp down debt risks without throttling the economy. (Reporting by Yawen Chen and Kevin Yao; Editing by Nick Macfie/Jeremy Gaunt)