China will implement a moderately accommodative monetary policy in 2026 and flexibly deploy a range of instruments including reserve requirement ratio (RRR) cuts and interest rate reductions to create a favorable monetary and financial environment for the 15th Five-Year Plan period (2026-2030), central bank governor Pan Gongsheng said Friday.
Speaking at a press conference on economic affairs during the fourth session of the 14th National People's Congress, Pan outlined the policy priorities of the People's Bank of China's (PBOC), the central bank, for 2026.
"Since 2025, the People's Bank of China has followed the decisions and plans of the central authorities and operated under the guidance of the Central Financial Commission to implement a moderately accommodative monetary policy. We have worked to better align central bank policies with market concerns and enhance their targeted impact and introduced a range of measures in terms of quantity, interest rates, and structure. These efforts have supported stable growth and high-quality development of the real economy, while the stable functioning of financial markets is secured," Pan said.
"Earlier this year, we introduced further adjustments to structural monetary policy tools. These include a 0.25 percentage point cut in interest rates on such tools, an expansion in the scale and scope of their application, refinement of relevant policy elements, and the establishment of a dedicated one trillion yuan relending facility for private enterprises," Pan said.
Pan stressed that promoting stable economic growth and reasonable price recovery will be important considerations in monetary policy this year.
On quantitative policy, Pan said the PBOC will comprehensively use short-, medium- and long-term policy tools including reserve requirements, reverse repos, medium-term lending facilities and government bond transactions to maintain ample liquidity and ensure that aggregate financing and money supply growth aligns with economic growth and price level targets. On interest rates, the bank will guide and regulate rate levels based on economic and financial conditions to keep comprehensive financing costs low. It will strengthen oversight of rate policy implementation and regulate market behaviors that could weaken monetary policy transmission. Banks will be required to clearly disclose annualized comprehensive financing costs to enterprises, the governor said.
On structural tools, Pan said the focus in 2026 will be on supporting domestic demand expansion, technological innovation and small and micro enterprises. Outstanding structural monetary policy tools stood at about 5.5 trillion yuan at end-January, accounting for approximately 11 percent of the PBOC's total assets.
Furthermore, the central bank will guide financial institutions in scientifically assessing risks, optimizing credit structures and implementing differentiated policies to curb "involution-style" competition in certain industries while supporting economic restructuring and upgrading. It will also enhance coordination with fiscal policy on interest subsidies, guarantees and risk cost-sharing to amplify policy effects, he said.
China's central bank to use RRR cuts, rate cuts flexibly to support 15th Five-Year Plan: governor
