People's Bank of China vice governor outlines moderately loose monetary policy and studies non-bank liquidity support mechanism

The People's Bank of China published remarks by Vice Governor Xuan Changneng from the International Monetary Fund and Bank of Thailand “Asia 2050” conference, where he discussed challenges facing Asian central banks and outlined the PBOC’s monetary policy stance and framework priorities, including potential liquidity support for non-bank institutions in specific circumstances. Xuan said emerging market economies face intertwined opportunities and risks as demographic shifts, technological progress and geopolitics affect growth, employment and financial stability, arguing that Asian central banks should strengthen domestic economic resilience, improve monetary policy frameworks and enhance macroeconomic coordination and cooperation. On China, he described growth momentum as steady, innovation as active, employment as broadly stable and the renminbi exchange rate as basically stable at a reasonable equilibrium level, while noting ongoing green and digital upgrades to infrastructure. He also reiterated that the PBOC will implement a moderately loose monetary policy, further refine the monetary policy framework with greater emphasis on price-based tools such as interest rates, strengthen a market-based interest-rate regulation mechanism, enrich the policy toolkit, improve structural monetary policy tools including arrangements to maintain capital market stability, and study establishing a liquidity support mechanism for non-bank institutions under certain circumstances.