【Financial Street Release】People's Bank of China: Emphasize the importance of strengthening the domestic big cycle and coordinate the relationship between aggregate supply and aggregate demand.

Sourced from: Xinhua Finance

Beijing, March 31—According to information released on the website of the People’s Bank of China on March 31, the People’s Bank of China’s Monetary Policy Committee held its 2026 first-quarter regular meeting (the 112th overall) on March 26.

The meeting held that, since the beginning of this year, macro policies have been more proactive and effective, and monetary policy has remained appropriately accommodative. Efforts should be made to strengthen counter-cyclical and cross-cyclical adjustment, and to comprehensively apply various monetary policy tools to create a suitable monetary and financial environment for sustained improvement in economic performance. The reform to the Loan Prime Rate (LPR) has continued to show results; the mechanism for market-oriented adjustments to deposit interest rates has played an effective role; the efficiency of monetary policy transmission has increased; and social financing costs remain at historically low levels. In the foreign exchange market, supply and demand are basically balanced. The RMB exchange rate follows a two-way floating mechanism and remains broadly stable at a reasonable and balanced level. The financial markets are operating generally smoothly.

The meeting analyzed domestic and international economic and financial conditions and believed that the influence of changes in the external environment has deepened, global economic momentum is weak, and geopolitical conflicts and trade and economic conflicts occur frequently. The economic performance of major economies has shown some differentiation, and there is uncertainty regarding inflation trends and adjustments to monetary policy. China’s economy has generally been stable overall and made progress while maintaining stability, and high-quality development has achieved new results, but it still faces issues and challenges such as strong supply with weak demand and external shocks. We should continue to implement an appropriately accommodative monetary policy, increase the力度 of counter-cyclical and cross-cyclical adjustments, better leverage the dual role of monetary policy tools in both quantity and structure, strengthen coordination and cooperation between monetary and fiscal policies, and promote stable economic growth and a reasonable rebound in prices.

The meeting studied the main thinking for monetary policy in the next stage and recommended that the integrated effects of incremental and stock policies be brought into play. Use a comprehensive array of tools, strengthen monetary policy regulation, and based on domestic and international economic and financial conditions and the operation of financial markets, get the intensity, pace, and timing of policy implementation right. Maintain ample liquidity so that growth in the size of social financing and in the money supply is aligned with economic growth and the expected target for the overall price level. Strengthen the guidance of the central bank’s policy interest rates, improve market-oriented interest rate formation and transmission mechanisms, give full play to the role of the market interest rate benchmark pricing self-discipline mechanism, and strengthen the execution and supervision of interest rate policies. Standardize the operating conduct of the credit market, reduce financing intermediary fees, and promote social综合 financing costs to remain at a low level. From a macro-prudential perspective, observe and assess bond market operations, and pay attention to changes in long-term yields. Keep monetary policy transmission mechanisms flowing and improve the efficiency of funds use. Enhance the resilience of the foreign exchange market, stabilize market expectations, and maintain the RMB exchange rate’s basic stability at a reasonable and balanced level.

The meeting pointed out that efforts should be made to guide large banks to play the main force role in providing financial services to the real economy, and to encourage small and medium-sized banks to focus on their primary responsibilities and core businesses, thereby strengthening banks’ capital strength. Make good use of various structural monetary policy tools, optimize tool management, and solidly do a good job on the “five major articles” of finance. Strengthen financial support for key areas such as expanding domestic demand, technological innovation, and small and micro enterprises. Continue to provide financial services that support the development and growth of the private sector. Maintain stable operation of financial markets. Effectively advance high-level bidirectional opening of finance, and improve the capacity for economic and financial management and risk prevention and control under conditions of opening.

The meeting emphasized that we should place strengthening the domestic large circulation in a more prominent position, coordinate the relationship between total supply and total demand, enhance the forward-looking, targeted, and synergistic nature of macro policies, focus on expanding domestic demand and optimizing supply, create better increments and revitalize existing stock, and continuously consolidate and expand the momentum of the economy maintaining stability and moving in a better direction.

Editor: Hu Yuting