People's Bank of China: Continue to implement a moderately easing monetary policy

Local News (Reporter Liu Qi) According to the People’s Bank of China website on March 31, the first quarterly meeting of the Monetary Policy Committee of the People’s Bank of China in 2026 (the 112th overall) was held on March 26.

The meeting held that, since the beginning of this year, macroeconomic policies have become more active and effective. Monetary policy has remained moderately accommodative, strengthening counter-cyclical and cross-cyclical adjustments. By comprehensively using various monetary policy tools, an appropriate monetary and financial environment has been created to support the economy’s sustained improvement and better performance. The reform of the loan prime rate (LPR) has continued to release results. The mechanism for market-oriented adjustments to deposit rates has been effectively implemented. The efficiency of monetary policy transmission has increased, and social financing costs are at historically low levels. In the foreign exchange market, supply and demand are basically balanced. The RMB exchange rate floats in both directions and remains fundamentally stable at a reasonable and balanced level. Financial markets have generally operated smoothly.

The meeting analyzed the domestic and international economic and financial situation, and held that the impact of changes in the external environment is deepening. The world economy’s growth momentum is weak. Geopolitical conflicts and trade and economic conflicts occur frequently and repeatedly. The economic performance of major economies has become somewhat differentiated. There is uncertainty in the inflation outlook and adjustments to monetary policy. China’s economic operations are generally stable and have continued to make progress while maintaining stability. Initial new achievements have been made in high-quality development. However, China still faces issues and challenges such as strong supply but weak demand and external shocks. We will continue to implement moderately accommodative monetary policy, increase the力度 of counter-cyclical and cross-cyclical adjustments, better play the dual total and structural functions of monetary policy tools, and strengthen coordination between monetary and fiscal policies to promote stable economic growth and a reasonable rebound in prices.

The meeting studied the main thinking for monetary policy in the next stage, and suggested that we should give full play to the integrated effects of both incremental policies and stock (existing) policies, and comprehensively use various tools to strengthen monetary policy regulation, based on the domestic and international economic and financial situation and the operation of financial markets, and handle well the intensity, pace, and timing of policy implementation. Keep liquidity ample so that the growth of social financing scale and money supply growth matches the targets for economic growth and the expected overall price level. Strengthen the guidance of central bank policy interest rates, improve the market-oriented formation and transmission mechanism of interest rates, and give full play to the role of the market interest rate pricing self-discipline mechanism. Strengthen the implementation and supervision of interest rate policies. Standardize business conduct in credit markets, reduce financing intermediary costs, and promote the sustained low level of social comprehensive financing costs. From the perspective of macroprudential management, observe and assess the operation of the bond market, and pay attention to changes in long-term yields. Keep the monetary policy transmission mechanism flowing, and improve the efficiency of capital 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 we should guide large banks to play their role as the main force in providing financial services to the real economy, and promote smaller and medium-sized banks to focus on their primary responsibilities and core businesses, enhancing banks’ capital strength. Make good use of various structural monetary policy tools, optimize tool management, and solidly carry out the financial “five major areas” of targeted support, strengthening financial support for key areas such as expanding domestic demand, scientific and technological innovation, and small and medium-sized enterprises (including micro, small, and medium-sized firms). Continue to do a good job in providing financial services to support the development and growth of the private economy. Maintain stable operation of financial markets. Effectively promote high-level two-way opening-up in finance, and improve economic and financial management capabilities and risk prevention and control capabilities under conditions of opening up.

(Editor: Wen Jing)

Keywords:

                                                            Monetary policy
                                                            Central bank