Strengthen monetary policy regulation and maintain the stable operation of financial markets

The People’s Bank of China (PBOC) reported on March 31 that, at the first quarterly meeting of the Monetary Policy Committee held recently in 2026, it was proposed to give full play to the integrated effects of incremental policies and stock (existing) policies, comprehensively use various tools, strengthen monetary policy management and control, and maintain the stable operation of financial markets.

The meeting analyzed the current domestic and international economic and financial situation, and believed that the impact of external environmental changes has deepened, global economic momentum is weak, and geopolitical conflicts and trade and economic conflicts occur frequently. The economic performance of major economies has shown some divergence, and there are uncertainties regarding the inflation trend and adjustments to monetary policy. China’s economy is generally operating steadily, with progress while maintaining stability, and high-quality development has achieved new results. However, it still faces issues and challenges such as strong supply with weak demand and external shocks. Efforts should continue to implement a moderately accommodative monetary policy, increase the strength of counter-cyclical and cross-cyclical adjustments, better leverage the dual functions of monetary policy tools in both overall amount and structure, strengthen coordination and cooperation between monetary and fiscal policies, and promote stable economic growth and a reasonable rebound in prices.

The meeting studied the main thinking for the monetary policy in the next stage. It suggested giving full play to the integrated effects of incremental policies and stock (existing) policies, comprehensively applying multiple tools, and strengthening monetary policy management and control. Based on the domestic and international economic and financial situation and the operation of financial markets, it should grasp the intensity, pace, and timing of policy implementation. Keep liquidity ample, so that the growth of social financing and money supply growth are consistent with economic growth and the expected target for the overall price level. Strengthen the guidance of the PBOC’s policy interest rates, improve the market-based interest rate formation and transmission mechanism, leverage the role of the market interest rate pricing self-regulatory mechanism, and strengthen the execution and supervision of interest rate policy. Standardize the business conduct of the credit market, reduce financing intermediary fees, and promote the sustained low level of overall social financing costs. From a macro-prudential perspective, observe and assess the operation of the bond market, and pay attention to changes in long-term yields. Unblock the transmission mechanism of monetary policy to improve the efficiency of capital use. Enhance the resilience of the foreign exchange market, stabilize market expectations, and keep the RMB exchange rate basically stable at a reasonable and balanced level.

The meeting pointed out that efforts should be made to guide large banks to play the main role in providing financial services to the real economy, and to encourage smaller and medium-sized banks to focus on their primary responsibilities and core businesses, while enhancing banks’ capital strength. Make good use of various structural monetary policy tools, optimize tool management, and solidly carry out the “Five Major Articles” of finance, strengthening financial support for key areas such as expanding domestic demand, technological innovation, and small and micro enterprises. Continue to provide financial services to support the growth and development of the private economy. Maintain the stable operation of financial markets. Effectively advance high-level two-way opening up of finance, and improve the capacity for economic and financial management and risk prevention and control under conditions of opening up.

The meeting emphasized that strengthening the domestic great circulation should be placed in a more prominent position, coordinate the relationship between total supply and total demand, enhance the forward-looking, targeted, and coordinated nature of macroeconomic policies, focus on expanding domestic demand and optimizing supply, do a better job in creating and mobilizing incremental resources and activating existing ones, and continuously consolidate and expand the momentum of the economy trending toward stability and improvement.