People's Bank of China: Continue to implement a moderately easing monetary policy

News Brief (Reporter: Liu Qi) According to information released on the People’s Bank of China website on March 31, the People’s Bank of China’s Monetary Policy Committee held its 2026 first-quarter meeting (112th overall) on March 26.

The meeting held that, since the beginning of this year, macro policies have become more active and effective, monetary policy has remained appropriately accommodative, and it will strengthen counter-cyclical and cross-cycle adjustments, and make comprehensive use of various monetary policy tools to create a suitable monetary and financial environment for the economy to continue improving for the better. The effectiveness of the loan prime rate reform has continued to be released; the role of the market-oriented adjustment mechanism for deposit interest rates has been effectively brought into play; monetary policy transmission efficiency has been enhanced; and social financing costs are at a historically low level. The foreign exchange market supply and demand are basically balanced; the RMB exchange rate floats in both directions and remains basically stable at a reasonable and balanced level. Financial markets are operating generally in a stable manner.

The meeting analyzed the domestic and international economic and financial situation, and held that the impact of changes in the external environment is deepening; global economic momentum is weak; geopolitical conflicts and economic and trade conflicts occur frequently and repeatedly; and the economic performance of major economies shows some divergence. There are uncertainties about the trend of inflation and adjustments to monetary policy. China’s economy is operating overall steadily, making progress while maintaining stability, and high-quality development has achieved new results, but it still faces issues and challenges such as strong supply with weak demand and external shocks. Efforts should continue to implement an appropriately accommodative monetary policy, increase the intensity of counter-cyclical and cross-cycle adjustments, better play the dual total-quantity and structural functions of monetary policy tools, strengthen financial and fiscal policy coordination, and promote steady economic growth and a reasonable rebound in prices.

The meeting studied the main ideas for monetary policy in the next stage. It suggested leveraging the integrated effects of both incremental policies and stock policies, making comprehensive use of various tools, and strengthening monetary policy regulation, so that, based on the domestic and international economic and financial situation and the operation of financial markets, the intensity, pace, and timing of policy implementation are well handled. Keep liquidity ample so that the growth of the scale of social financing and the growth of money supply are aligned with economic growth and the expected target for the overall level of prices. Strengthen guidance from the central bank’s policy interest rates, improve the market-oriented interest-rate formation and transmission mechanism, give full play to the market interest rate pricing self-discipline mechanism, and strengthen the implementation and oversight of interest rate policies. Standardize the operating conduct of the credit market, reduce financing intermediary fees, and promote social overall financing costs to run at a low level. From a macroprudential perspective, observe and assess the bond market’s operation, and pay attention to changes in long-term yields. Ensure smooth monetary policy transmission and improve the efficiency of capital use. Enhance the resilience of the foreign exchange market, stabilize market expectations, and maintain the RMB exchange rate’s basic stability at a reasonable and balanced level.

The meeting pointed out that efforts should be made to guide large banks to play the role of the main force in serving the real economy, promote medium-sized and small banks to focus on their primary responsibilities, and strengthen banks’ capital strength. Make good use of various structural monetary policy tools, optimize tool management, and solidly do well the “Five Major Articles” of financial services, enhance financial support for key areas such as expanding domestic demand, technological innovation, and small and micro enterprises, and continue to provide financial services to support the development and growth of the private economy. Maintain stable and sound operation of financial markets. Effectively advance high-level two-way opening of finance, and improve the capacity for economic and financial management and risk prevention and control under conditions of opening.

(Editor: Wen Jing)

Keywords:

                                                            Monetary Policy
                                                            PBOC