Maintain the stable operation of the financial markets! The latest meeting of the Central Bank's Monetary Policy Committee is here.

The People’s Bank of China Monetary Policy Committee held its first meeting of the year 2026 for the first quarter (the 112th meeting overall) recently.

The meeting suggested leveraging the integrated effects of incremental policies and existing stock policies, comprehensively applying various tools, strengthening monetary policy regulation, and, based on domestic and international economic and financial conditions as well as the operation of financial markets, getting the intensity, pace, and timing of policy implementation right.

The meeting believed that since this year began, macro policies have been more proactive and effective, and monetary policy has remained appropriately accommodative, creating suitable monetary and financial conditions for the economy to keep improving steadily. Social financing costs are at historically low levels. In the foreign exchange market, supply and demand are basically balanced; the RMB exchange rate floats both ways and remains basically stable at a reasonable and balanced level. Financial markets have overall been operating smoothly.

Compared with the previous quarter’s meeting, in analyzing external conditions, this meeting pointed out that changes in the external environment have increasingly intensified their impact, and the assessment of the world economic growth momentum has shifted from “insufficient” in the previous quarter’s meeting to “weak.” It also noted that the economic performance of major economies has diverged to some extent, and there is uncertainty regarding the inflation trend and adjustments to monetary policy. In analyzing the problems and challenges facing the domestic economy, while continuing to emphasize the “strong supply and weak demand” issue, this meeting also proposed the challenge of “external shocks.”

Accordingly, the meeting proposed that monetary policy should continue to be appropriately accommodative, with efforts increased to strengthen countercyclical and cross-cycle adjustments, so that the monetary policy tools can better play both their total and structural dual roles. It should strengthen coordination and cooperation between monetary and fiscal policies, and promote steady economic growth and a reasonable rebound in prices.

The meeting studied the main thinking for monetary policy in the next phase. It suggested leveraging the integrated effects of incremental policies and existing stock policies, comprehensively applying various tools, strengthening monetary policy regulation, and, based on domestic and international economic and financial conditions as well as the operation of financial markets, getting the intensity, pace, and timing of policy implementation right. Maintain ample liquidity so that growth in the scale of social financing and in money supply is aligned with the targets for economic growth and the overall price level’s expected goals.

On interest rates, the meeting continued to suggest strengthening guidance through the central bank’s policy interest rates, improving the market-oriented interest rate formation and transmission mechanism, giving full play to the role of the market interest rate pricing self-discipline mechanism, and strengthening the implementation and supervision of interest rate policies. Standardize the operating behavior of the credit market, reduce financing intermediary costs, and promote the running of social composite financing costs at a low level.

Regarding the bond market, the meeting suggested, from a macroprudential perspective, observing and assessing how the bond market is operating, and paying attention to changes in long-term yields. Improve the smooth transmission mechanism of monetary policy and enhance the efficiency of capital use.

For the foreign exchange market, the meeting emphasized enhancing the resilience of the foreign exchange market, stabilizing market expectations, and maintaining the RMB exchange rate’s basic stability at a reasonable and balanced level.

Although the meeting did not mention “maintaining stability in the capital market,” it emphasized continuously doing a good job in financial services that support the development and growth of the private sector. Maintain the stable operation of financial markets.

Layout: Wang Yunpeng

Proofread by: Liao Shengchao