The People's Bank of China held a Party committee meeting chaired by Governor Pan Gongsheng to study the Central Economic Work Conference and the National Financial System Work Conference, and set out priorities for the central bank’s work in 2026. The agenda centres on maintaining a “moderately loose” monetary policy while strengthening the institutional framework for monetary policy, macroprudential management and systemic risk prevention. Priorities include dynamically assessing and refining the monetary policy framework, expanding the policy toolkit and improving policy implementation and transmission. Monetary policy will take stable growth and a “reasonable” rebound in prices as important considerations, with flexible use of tools including reserve requirement ratio cuts and interest rate cuts to keep liquidity ample and financing costs low, while improving coordination with fiscal policy and directing financial support to areas such as domestic demand expansion, technological innovation and small and micro enterprises; the central bank also reiterated keeping the renminbi exchange rate basically stable at a reasonable and balanced level. On financial stability, the plan covers stronger risk monitoring and early warning, a basic regulatory framework for systemically important financial institutions, work on local government financing platform debt risk resolution, market- and law-based handling of smaller financial institution risks, real estate financial macroprudential management, and a mechanism to provide liquidity to non-bank financial institutions under specific scenarios. The meeting also set operational priorities for the year-end and start-of-year period, including closer monitoring to maintain orderly markets, ensuring payment and settlement and cash supply, and safeguarding the safe and stable operation of financial infrastructure, alongside planning for the next year and the next five years.
Central Bank of the Republic of China 2025-12-12
People's Bank of China sets 2026 priorities to keep monetary policy moderately loose and strengthen financial risk controls
The People's Bank of China, led by Governor Pan Gongsheng, outlined its 2026 priorities, focusing on a "moderately loose" monetary policy and strengthening the institutional framework for monetary policy, macroprudential management, and systemic risk prevention. Key measures include flexible use of tools like reserve requirement ratio and interest rate cuts, coordination with fiscal policy, and financial support for domestic demand, technological innovation, and small enterprises. The bank also emphasized financial stability through enhanced risk monitoring, a regulatory framework for systemically important institutions, and liquidity mechanisms for non-bank financial institutions.