Monetary Policy to Remain Loose, Stability and Growth as Top Priorities
Pan Gongsheng, Governor of the People's Bank of China, recently stated in an interview that the central bank will continue to adopt a proactive yet prudent approach in 2026, maintaining a moderately loose monetary policy with a focus on stabilizing economic growth and promoting a reasonable recovery in prices.
Room for Further Rate and Reserve Requirement Cuts
Pan noted that in terms of aggregate policy, the central bank will flexibly deploy tools such as reserve requirement ratio (RRR) cuts and interest rate reductions to ensure sufficient market liquidity. He emphasized that there remains room for further easing this year to align the growth of total social financing and money supply with macroeconomic and inflation targets.
Lowering Financing Costs to Support High-Quality Growth
In addition to macro-level adjustments, the PBOC will enhance the implementation and oversight of interest rate policies to keep overall financing costs at a low level. This move is expected to alleviate funding pressures on businesses and boost market confidence, contributing to sustainable and stable financial development.
Strong Financial Support for a Solid Start to the 15th Five-Year Plan
Pan added that the central bank will leverage the structural role of monetary policy, integrating new and existing policy measures to provide strong financial backing for the successful implementation of the 15th Five-Year Plan. This reflects the PBOC’s proactive stance in stabilizing the economy and managing potential risks.