Pan Gongsheng: Flexibly and efficiently use various monetary policy tools such as reserve requirement ratio cuts and interest rate reductions; there is still some room for reserve requirement ratio cuts and interest rate reductions this year

Pan Gongsheng, the Governor of the People's Bank of China, stated that in 2026, the People's Bank of China will continue to implement a moderately accommodative monetary policy, with promoting stable economic growth and reasonable price recovery as important considerations for monetary policy. It will leverage the integrated effects of incremental and stock policies to create a favorable monetary and financial environment for stable economic growth, high-quality development, and the stable operation of financial markets, providing strong financial support for a good start to the 14th Five-Year Plan. In terms of aggregate policy, various monetary policy tools such as reserve requirement ratio cuts and interest rate reductions will be flexibly and efficiently utilized to maintain ample liquidity, ensuring that the growth of social financing scale and money supply aligns with economic growth and overall price level expectations. There is still some room for reserve requirement ratio cuts and interest rate reductions this year. The People's Bank of China will also ensure the execution and supervision of interest rate policies to promote low comprehensive financing costs for society. In terms of structural policies, the People's Bank of China has introduced a series of monetary and financial policies at the beginning of this year, optimizing and improving the policy elements of structural monetary policy tools. Regarding interest rates, the rates of various structural monetary policy tools have been reduced by 0.25 percentage points. In terms of types, a separate relending of 1 trillion yuan for private enterprises has been established, and a risk-sharing tool for technology innovation and private enterprise bonds has been merged. In terms of quotas, the relending quota for supporting agriculture and small enterprises has been increased by 500 billion yuan to 4.35 trillion yuan, and the relending quota for technology innovation and technological transformation has been increased by 400 billion yuan to 1.2 trillion yuan. In terms of support scope, the support areas for carbon reduction support tools and relending for consumer services and elderly care have been expanded. These policies have been implemented. We will also continue to maintain the stable operation of financial markets. Proper expectation management will be conducted to keep the RMB exchange rate basically stable at a reasonable and balanced level. Supervision and management of the bond market, foreign exchange market, money market, bill market, and gold market will be strengthened. A mechanism for providing liquidity to non-bank institutions under specific scenarios will be established.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk.