The People's Bank of China published a transcript of a State Council Information Office press conference outlining 2025 monetary and financial policy results and flagging a new set of early-year measures for 2026 under a “moderately loose” monetary policy stance. The package centres on a reduction in the pricing of structural monetary policy instruments and an expansion and reconfiguration of targeted re-lending and related tools to steer credit to priority sectors and support economic restructuring. Measures announced include a 0.25 percentage point cut in the interest rate across structural monetary policy instruments, with the one-year re-lending rate reduced to 1.25% from 1.5% and other tenors adjusted accordingly. The central bank will combine the re-lending and re-discount quotas for agriculture and small businesses, increase the agriculture and small business re-lending quota by CNY 500 billion, and establish a separate re-lending facility for private enterprises with a total quota of CNY 1 trillion focused on small and medium-sized private firms. Re-loans for scientific and technological innovation and technological transformation will be raised to CNY 1.2 trillion from CNY 800 billion and extended to private small and medium-sized enterprises with high research and development intensity, while the private enterprise bond financing support tool and the science and technology innovation bond risk sharing tool will be merged with CNY 200 billion of re-loan support. The package also expands the scope of the carbon emission reduction support tool, extends service consumption and pension re-lending to include the health industry once identification standards are clarified, lowers the minimum down payment ratio for commercial housing purchase loans to 30% in coordination with the State Administration of Financial Supervision, and encourages financial institutions to strengthen exchange rate hedging services. Policy documents covering these measures are expected to be released in the near future, and implementation is intended to be coordinated with fiscal tools such as interest subsidies, guarantees and risk cost sharing.
Central Bank of the Republic of China 2026-01-15
People's Bank of China cuts structural re-lending rates by 25 basis points and sets a CNY 1 trillion quota for private enterprise re-lending
The People's Bank of China announced a "moderately loose" monetary policy for 2026, featuring a 0.25 percentage point interest rate cut on structural monetary policy instruments and expanded re-lending facilities, including a CNY 1 trillion quota for private enterprises. Additional measures include increased re-loans for innovation, expanded carbon emission reduction support, and reduced down payment ratios for commercial housing loans, with forthcoming policy documents.