The central bank continues to maintain a moderately loose monetary policy tone, and the coordination of aggregate adjustment and structural tools stabilizes growth

In the second half of 2026, China's domestic macroeconomic policy adhered to the general tone of seeking progress while maintaining stability. The People's Bank of China continued to implement a moderately loose monetary policy, balancing multiple objectives such as stabilizing growth, maintaining price stability, and preventing risks. Relying on aggregate tools to support liquidity and structural tools to precisely target key areas, the central bank continued to unclog the transmission channels of monetary policy to the real economy.

At the overall level, the central bank insists on maintaining reasonable and sufficient liquidity, flexibly using open market operation tools such as reverse repurchase and medium-term lending facilities, smoothing short-term fund fluctuations, and ensuring the smooth operation of the money market. At the policy level, it is clear that the growth rate of money supply and social financing scale matches the expected targets of economic growth and price levels, avoiding significant fluctuations in capital tightness. At the same time, we will continue to guide the loan market quotation interest rate to steadily decline, and promote the comprehensive financing cost of the real economy to remain low.

Structural monetary policy tools have become an important lever for policy implementation. The current tool focuses on three major directions: expanding domestic demand, technological innovation, small and micro enterprises, and green industries. Guiding financial institutions to increase credit allocation through low-cost funds, providing targeted support for high-end manufacturing and new quality productivity related industries, and assisting in the independent and controllable development of the industrial chain. Different from aggregate policies, structural tools focus on optimizing credit structure, guiding financial resources to flow into policy encouraged areas, and avoiding funds from idling within the financial system.

In terms of exchange rate management, the central bank continues to adhere to the implementation of a managed floating exchange rate system, and plays an automatic stabilizer role in regulating macroeconomic and international payments through exchange rate adjustments. The market should establish a two-way fluctuation awareness of the RMB exchange rate, and the central bank should not pursue a single fixed point, but focus on preventing exchange rate overshoot risks and stabilizing market expectations. With the gradual decline of external inflation, the adjustment of overseas monetary policy expectations, and the marginal easing of external constraints, it provides greater space for domestic monetary policy operations.

There are still bottlenecks in the policy transmission process. Some small and medium-sized enterprises still face practical constraints such as credit access barriers and guarantee conditions; Part of the funds are concentrated in mature industries, and the long-term financing channels for emerging industries still need to be expanded. Regulatory guidance continues to guide commercial banks to improve their internal assessment mechanisms, optimize credit processes, and enhance their willingness to provide financial services to the real economy.

The market is generally concerned about the follow-up policy space. Institutional analysis suggests that the monetary policy tool library is still sufficient, and tools such as reserve requirement ratio cuts and interest rate cuts may be used, depending on economic data, price trends, and external environmental changes. Policy adjustments pay more attention to forward-looking predictions and flexible adjustments, and will not adopt strong stimulus models, pursuing policy sustainability.

Risk prevention is also an important goal of monetary policy. The central bank continues to coordinate development and security, orderly resolve financial risks related to local debt and real estate, improve risk monitoring and early warning mechanisms, and safeguard the bottom line of preventing systemic financial risks. Liquidity allocation balances short-term stable growth with long-term risk prevention and control, balancing short-term stimulus with long-term structural transformation.

Looking ahead to the future, monetary policy will continue to maintain continuity, stability, and sustainability. Macro policies will not make sharp turns, while focusing on improving policy effectiveness. Both the capital market and real enterprises need to adapt to the policy environment of "moderate easing and precise force", continuously track changes in core indicators such as prices, employment, and domestic demand, and rationally judge the pace of policies.