The People's Bank of China published its second-quarter monetary policy implementation report, maintaining a moderately loose stance and signaling stronger countercyclical support as external risks increase. It plans to keep liquidity ample and financing conditions relatively loose, while aligning growth in social financing and the money supply with economic growth and price objectives. Measures implemented in the first half included a 25-basis-point cut in structural monetary policy tool rates, a narrowing of the temporary repo and reverse repo corridor to 50 basis points from 70 basis points, and a new CNY 1 trillion relending facility for private enterprises. At the end of June, outstanding aggregate financing and broad money supply rose 7.4% and 8.0% year over year, respectively. New corporate loan rates were about 3.0%, while the renminbi had appreciated 3% against the U.S. dollar since the end of 2025. The central bank will adjust the scale, pace and timing of its tools as conditions evolve, deepen reform of its operating framework and strengthen support for domestic demand, technological innovation and small businesses. It will also maintain exchange-rate flexibility, guard against excessive currency movements and expand its macroprudential and financial stability functions.
Central Bank of the Republic of China2026-08-12
People's Bank of China maintains moderately loose policy, prepares stronger countercyclical support
The People's Bank of China will maintain a moderately loose monetary policy and strengthen countercyclical support while keeping liquidity ample and financing conditions relatively loose. First-half measures included a 25-basis-point reduction in structural tool rates and a CNY 1 trillion relending facility for private enterprises. The central bank will prioritize domestic demand, technological innovation and small businesses while guarding against excessive exchange-rate movements and systemic financial risks.