BEIJING -- People's Bank of China Governor Pan Gongsheng, speaking at the China Development Forum 2026 in Beijing on 22 March, said China will maintain a supportive monetary policy stance and continue to implement a moderately loose monetary policy, to create a favourable environment for stable economic growth and high-quality development in China's economy. Pan outlined a multifaceted toolkit—including adjustments to reserve requirement ratios, policy interest rates, and open market operations—to ensure adequate liquidity across the financial system.
STRATEGIC LIQUIDITY MEASURES
On March 25, 2026, the central bank conducted a 500-billion-yuan one-year medium-term lending facility (MLF) operation, conducted via variable-rate tenders with a fixed quantity and multiple-price auction. This infusion offsets 450 billion yuan in maturing MLF funds, delivering a net liquidity injection of 50 billion yuan—the 13th consecutive month of such support. The move aims to maintain adequate liquidity in the country's banking system.
Complementing this, the PBOC has listed the reserve requirement ratio among the tools it will use to keep liquidity ample. Recent actions include cutting the foreign-exchange risk reserve ratio for forward FX sales from 20% to zero, effective 2 March. Pan said social financing conditions are accommodative, with financial aggregates growing at a reasonable pace.
YUAN STABILITY SIGNALS
On March 25, the bank set the USD/CNY reference rate at 6.8911, a 32-pip strengthening from the prior day's 6.8943. China follows a managed floating exchange rate regime, under which the onshore yuan can trade up to 2% either side of the daily midpoint. Pan said the renminbi had appreciated by about 1.3% against the US dollar since the start of the year, and that China has neither the need nor the intention to gain trade advantages through currency depreciation.
HIGH-QUALITY DEVELOPMENT FOCUS
Pan said the supportive stance is intended to create a favourable monetary and financial environment for stable economic growth, high-quality development and the smooth operation of financial markets. Pan also emphasised steady promotion of high-level opening-up of the financial sector, deeper financial market connectivity and cross-border payment system interoperability, and welcomed overseas investors to invest in China's financial markets.
Pan said the renminbi has made positive progress in internationalisation in recent years, giving domestic and foreign entities more diversified currency choices, and that its financing cost remains relatively low.