Central Bank: We must continue to implement a moderately loose monetary policy and increase countercyclical adjustment
The Zhitong Finance App learned that the Monetary Policy Committee of the People's Bank of China held its regular meeting for the third quarter of 2026 (114th overall) on September 19. The conference analyzed the domestic and foreign economic and financial situation, believing that the current external environment is more complex and varied, the momentum of world economic growth is weak, geographical conflicts and economic and trade frictions are frequent, the economic performance of major economies is divided, and there is uncertainty about inflation trends and monetary policy adjustments. China's economy is generally running smoothly, with new momentum and excellent structure. High-quality development has achieved new results, yet it still faces problems and challenges such as strong supply and demand, structural differentiation, and external shocks. It is necessary to continue to implement a moderately loose monetary policy, increase countercyclical adjustment efforts, make better use of the total and structural functions of monetary policy instruments, strengthen coordination and coordination of monetary and fiscal policies, and promote steady economic growth and a reasonable recovery in prices.
The conference studied the main ideas of monetary policy in the next phase, and recommended using the integrated effects of incremental policies and stock policies, enhancing the forward-looking, flexible and pertinent nature of policies, and grasping the intensity, pace and timing of policy implementation based on domestic and foreign economic and financial situations and financial market operations. Use monetary policy tools comprehensively and adjust in due course to maintain abundant liquidity, so that the scale of social financing and the growth in money supply match the expected goals of economic growth and overall price levels. Promote the reform and improvement of the monetary policy operating framework. Standardize the operation of the credit market, reduce intermediate costs of financing, and promote the operation of comprehensive social financing at a low cost. Observe and evaluate the operation of the bond market from a macroprudential perspective, and pay attention to changes in long-term yields. Unblock the transmission mechanism of monetary policy and improve the efficiency of the use of capital. Adhere to the decisive role of the market in exchange rate formation, enhance the resilience of the foreign exchange market, stabilize market expectations, prevent the market's “flock effect” and self-strengthening of irrational expectations, and maintain the basic stability of the RMB exchange rate at a reasonable equilibrium level.
The full text is as follows:
The Monetary Policy Committee of the People's Bank of China held a regular meeting for the third quarter of 2026
The Monetary Policy Committee of the People's Bank of China held its regular meeting for the third quarter of 2026 (114th overall) on September 19.
The conference believes that since this year, macroeconomic policies have been more active and promising. Monetary policy has been moderately relaxed, countercyclical and cross-cycle adjustments have been strengthened, and various monetary policy tools have been used comprehensively to create an appropriate monetary and financial environment for the economy to continue to improve and improve. The effectiveness of the loan market quoted interest rate reform continues to be unleashed, the market-based adjustment mechanism for deposit interest rates plays an effective role, the transmission efficiency of monetary policy has increased, and social financing costs are at historically low levels. Supply and demand in the foreign exchange market are basically balanced, and the RMB exchange rate fluctuates in both directions, maintaining basic stability at a reasonable equilibrium level. The financial market is generally running smoothly.
The conference analyzed the domestic and foreign economic and financial situation, believing that the current external environment is more complex and varied, the momentum of world economic growth is weak, geographical conflicts and economic and trade frictions are frequent, the economic performance of major economies is divided, and there is uncertainty about inflation trends and monetary policy adjustments. China's economy is generally running smoothly, with new momentum and excellent structure. High-quality development has achieved new results, yet it still faces problems and challenges such as strong supply and demand, structural differentiation, and external shocks. It is necessary to continue to implement a moderately loose monetary policy, increase countercyclical adjustment efforts, make better use of the total and structural functions of monetary policy instruments, strengthen coordination and coordination of monetary and fiscal policies, and promote steady economic growth and a reasonable recovery in prices.
The conference studied the main ideas of monetary policy in the next phase, and recommended using the integrated effects of incremental policies and stock policies, enhancing the forward-looking, flexible and pertinent nature of policies, and grasping the intensity, pace and timing of policy implementation based on domestic and foreign economic and financial situations and financial market operations. Use monetary policy tools comprehensively and adjust in due course to maintain abundant liquidity, so that the scale of social financing and the growth in money supply match the expected goals of economic growth and overall price levels. Promote the reform and improvement of the monetary policy operating framework. Standardize the operation of the credit market, reduce intermediate costs of financing, and promote the operation of comprehensive social financing at a low cost. Observe and evaluate the operation of the bond market from a macroprudential perspective, and pay attention to changes in long-term yields. Unblock the transmission mechanism of monetary policy and improve the efficiency of the use of capital. Adhere to the decisive role of the market in exchange rate formation, enhance the resilience of the foreign exchange market, stabilize market expectations, prevent the market's “flock effect” and self-strengthening of irrational expectations, and maintain the basic stability of the RMB exchange rate at a reasonable equilibrium level.
The conference pointed out that large banks should be guided to play the main role of financial services in the real economy, push small and medium-sized banks to focus on their main business, and enhance banks' capital strength. Make good use of various structural monetary policy tools, continuously improve the design and management of tools, do a solid job in the “Five Major Articles” on finance, and strengthen financial support in key areas such as expanding domestic demand, scientific and technological innovation, micro, small and medium-sized enterprises, and the construction of the “six networks”. Continue to improve financial services to support the growth of private economic development. Maintain the stable operation of the financial market. Effectively promote a high level of two-way financial openness, and improve economic and financial management capabilities and risk prevention and control capabilities under open conditions.
The conference emphasized the need to be guided by Xi Jinping's ideology of socialism with Chinese characteristics in the new era, fully implement the spirit of the Fourth Plenary Session of the 20th CPC Central Committee, the Central Economic Work Conference, and the National Two Sessions, firmly grasp the top tasks of high-quality development in accordance with the decisions and arrangements of the Party Central Committee and the State Council, solidly push forward Chinese-style modernization, fully implement the new development concept in a complete, accurate and comprehensive manner, and accelerate the construction of a new development pattern. Coordinate the relationship between total supply and aggregate demand, increase efforts to expand domestic demand and optimize supply, accelerate the conversion of old and new kinetic energy, enhance endogenous momentum for economic development, further strengthen the domestic cycle, improve domestic and international dual cycles, and promote continuous economic development in a new direction and improvement.
The meeting was presided over by Pan Gongsheng, Governor of the People's Bank of China and Chairman of the Monetary Policy Committee. Monetary Policy Committee members Liao Min, Xuan Changneng, Zou Lan, Ding Xiangqun, Wu Qing, Kang Yi, Zhu Hexin, Gu Shu, Wang Yiping, and Huang Haizhou attended the meeting. Xu Shouben and Li Chunlin took leave of absence due to official duties. Comrades in charge of the People's Bank of China's Heilongjiang Branch, Zhejiang Branch, Anhui Branch, Shaanxi Branch, and Ningxia Hui Autonomous Region attended the meeting.
This article was edited by “People's Bank of China”; Zhitong Finance Editor: Huang Xiaodong.