On March 26, 2026, the Monetary Policy Committee of the People’s Bank of China (PBOC) held its first quarterly meeting of the year. This was the 112th meeting of the committee.
Current Economic and Monetary Situation
The committee noted that since the start of 2026, China’s economic policies have been more active. The monetary policy has remained moderately supportive to help the economy grow.
The central bank has used different tools to maintain a stable financial environment. Because of this:
- The economy is improving in quality and performance
- Loan interest rate reforms are working well
- Deposit rates are adjusting properly based on market conditions
- Borrowing costs for businesses are at very low levels
The foreign exchange market is also stable. The Chinese currency (RMB) has moved up and down but stayed mostly stable. Financial markets in general are functioning smoothly.
Challenges Facing the Economy
The meeting discussed both global and domestic challenges. Globally, the economy is facing:
- Slow growth
- Geopolitical and trade conflicts
- Differences in growth among major countries
- Uncertainty about inflation and interest rates
In China, the economy is stable but still has some problems:
- Supply is strong but demand is weak
- External shocks are affecting growth
- Some structural challenges remain
Because of these issues, the committee said that supportive monetary policy must continue.
Future Monetary Policy Plans
The PBOC plans to continue using a flexible and supportive policy approach.
Key steps include:
- Using both existing and new policy tools together
- Keeping enough liquidity (money supply) in the system
- Ensuring credit growth matches economic growth
- Keeping inflation at a reasonable level
The central bank will also:
- Improve interest rate systems
- Strengthen supervision of lending practices
- Reduce financing costs further
- Monitor bond markets and long-term interest rates
- Improve how policy decisions affect the economy
The goal is to make sure money flows efficiently in the economy.
Focus on Banking and Financial Support
The meeting highlighted the role of banks in supporting the economy:
- Large banks should take a leading role
- Small and medium banks should focus on their core activities
- Banks should strengthen their capital
The PBOC will also support key sectors such as:
- Technology and innovation
- Green finance
- Small businesses
- Digital finance
- Elderly care services
Special focus will be given to boosting domestic demand and supporting private businesses.
Maintaining Stability and Opening Up
The central bank aims to:
- Keep financial markets stable
- Improve risk management
- Support gradual opening of the financial sector
It will also work to maintain stability in the foreign exchange market and manage risks in a globally connected economy.
Long-Term Economic Goals
The meeting stressed that China will continue focusing on high-quality development.
The key priorities include:
- Strengthening domestic demand
- Balancing supply and demand
- Improving policy coordination
- Using resources efficiently
- Supporting long-term economic growth
The aim is to build a strong and stable economic system with steady growth in the coming years.
Meeting Leadership and Participants
The meeting was chaired by Pan Gongsheng, Governor of the PBOC. Other members and officials from different regions also attended, while a few members were absent due to official duties.
