PBOC: Will Continue to Implement Moderately Loose Monetary Policy

(CNA Taipei, July 8) The People's Bank of China (PBOC) announced on its official WeChat account on the 8th that China's economy still faces challenges such as strong supply and weak demand, structural differentiation, and external shocks. Moving forward, it will continue to implement a moderately loose monetary policy to promote stable economic growth and a reasonable rebound in prices.

The People's Bank of China stated that its Monetary Policy Committee held its second quarter (113th) regular meeting of 2026 on July 4th, chaired by Pan Gongsheng, Governor of the People's Bank of China and Chairman of the Monetary Policy Committee.

The meeting analyzed the domestic and international economic and financial situation, concluding that the external environment is currently more complex and volatile, with weak global economic growth momentum, frequent geopolitical conflicts and trade frictions, divergent economic performance among major economies, and uncertainty in inflation trends and monetary policy adjustments.

The meeting acknowledged that China's economic operations are generally stable, moving towards new and improved patterns, with new achievements in high-quality development. However, challenges such as strong supply and weak demand persist. It is necessary to continue implementing a moderately loose monetary policy, increase counter-cyclical and cross-cyclical adjustments, better leverage the dual functions of monetary policy tools in terms of aggregate and structural aspects, and strengthen the coordinated efforts of monetary and fiscal policies to promote stable economic growth and a reasonable rebound in prices.

The meeting also pointed out the need to guide large banks to play their role as the main force in serving the real economy and to encourage small and medium-sized banks to focus on their core responsibilities and main businesses, thereby enhancing their capital strength.

The meeting further emphasized that the central bank should coordinate the relationship between aggregate supply and aggregate demand, focus on expanding domestic demand and optimizing supply, improve new growth areas and revitalize existing stock, enhance the endogenous momentum of economic development, further strengthen the domestic great circulation, optimize the domestic and international dual circulation, and continuously consolidate and expand the trend of stable and positive economic development. (Editor: Chu Chien-ling / Lu Chia-jung) 1150708

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