Central Bank: Implementing a moderately loose monetary policy well

The People's Bank of China (PBOC) has released the report on the implementation of China's monetary policy for the first quarter of 2025. In the next phase, a moderately loose monetary policy will be implemented. Based on the domestic and international economic and financial situation and the operation of the financial markets, the policy implementation will be flexibly adjusted in terms of intensity and pace to maintain adequate liquidity, ensuring that the scale of social financing and the supply of money grow in line with economic growth and the expected target of overall price levels. Promoting a reasonable rise in prices is an important consideration in guiding monetary policy, and efforts will be made to keep prices at a reasonable level. The monetary policy transmission mechanism will be kept smooth, the interest rate control framework will be further improved, the implementation and supervision of interest rate policies will be strengthened, and efforts will be made to reduce the cost of bank liabilities to lower the overall financing cost in society. The dual functions of the overall quantity and structure of monetary policy tools will be utilized, focusing on key areas, applying reasonable moderation, and stepping forward and backward accordingly, guiding financial institutions to support technology finance, green finance, inclusive micro and small enterprises, expanding consumption, stabilizing foreign trade, among others. Market-based principles, a reference to a basket of currencies for adjustment, and a managed floating exchange rate system will be adhered to, with the market playing a decisive role in determining exchange rates to enhance the resilience of the foreign exchange market, stabilize market expectations, correct pro-cyclical behaviors in the market, address disruptions to market order, prevent risks of exchange rate overshooting, and maintain the stability of the RMB exchange rate at a reasonable and balanced level. Explorations will be made to expand the functions of the central bank in macro-prudential supervision and financial stability to maintain stability in the financial markets and firmly guard against the occurrence of systemic financial risks.