People’s Bank of China sets second-half priorities, pledges moderately loose policy and stronger countercyclical adjustment

The People’s Bank of China set out its priorities for the second half of 2026, including continued moderately loose monetary policy, stronger countercyclical adjustment and the potential introduction of additional measures. It will adjust monetary policy tools as appropriate, maintain ample liquidity and seek to align growth in aggregate financing and the money supply with economic growth and the expected price target. The central bank also plans to keep overall financing costs low, preserve exchange-rate flexibility and maintain the renminbi’s basic stability at a reasonable and balanced level. Structural tools will continue to support technology, private enterprises and small and midsize businesses. The central bank will develop the bond market’s technology board, implement the risk-sharing tool for technology and private enterprise bonds, and improve credit enhancement and data-sharing arrangements. At the end of June, aggregate financing was 7.4% higher than a year earlier, broad money grew 8.0%, lending across the five priority areas increased 11%, and cumulative technology innovation bond issuance exceeded CNY 2.8 trillion. Other priorities include managing local government financing platform and vulnerable institution risks, expanding the macroprudential toolkit, strengthening market enforcement and improving deposit insurance effectiveness. The central bank will also advance two-way Bond Connect access, support further Panda bond issuance, develop offshore renminbi markets and cross-border payment infrastructure, and improve the digital renminbi’s cross-border infrastructure.