China's central bank to maintain moderately loose monetary policy in 2026

BEIJING -- China's central bank on Tuesday said that it will continue to implement a moderately loose monetary policy in 2026, using tools such as reserve requirement ratio and interest rate cuts to maintain ample liquidity.

The People's Bank of China (PBOC) will position high-quality economic development and a reasonable rebound in prices as key monetary policy objectives, it said in a statement released after its annual work conference, which outlined key tasks for this year.

Efforts will be made to keep the RMB exchange rate basically stable at a reasonable and balanced level, and to guard against the risk of an exchange rate overshoot, it said.

The PBOC will step up financial support for key areas such as domestic demand expansion, technological innovation, and micro, small and medium-sized enterprises. It will also make effective use of refinancing tools for services consumption and elderly care to drive increased credit allocation in the services consumption sector.

Among other priorities, the central bank highlighted the need to contain financial risks in key sectors, with plans in place to establish a mechanism to provide liquidity for non-banking institutions in specific scenarios.

The PBOC will deepen financial reform and opening-up, promote reforms in global financial governance, and enhance its financial management and service capabilities.