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The headquarters of the People's Bank of China in Beijing Photo: IC

The People's Bank of China (PBC), the central bank, said on Thursday that it will adjust and optimize the strength and pace of policies at the appropriate time based on domestic and international economic and financial conditions, as well as the operation of the financial markets, while it will well implement a moderately loose monetary policy and utilize various monetary policy tools. 

The fourth-quarter monetary policy report released by the PBC said that it will well implement a moderately loose monetary policy, comprehensively adopt various monetary policy tools, align the growth of the social financing scale and money supply with the expected targets for economic growth and overall price levels.

It also plans to keep prices at a reasonable level while taking the reasonable rebound in prices as an important consideration in understanding monetary policy. The PBC will keep liquidity ample and keep the yuan's exchange rate basically stable at a reasonable and balanced level, while promoting the reduction of financing costs for enterprises and the cost of consumer credit.

As 2025 is unfolding, the utilization of the PBC's rich policy tools - such as if there is a need for further monetary easing, interest rate adjustments, or some other short-term market liquidity arrangement - will be determined in accordance with the actual economic situation, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Thursday.

Speaking on the central bank's upcoming work, Xi said that the central bank may increase the purchase of government bonds as an approach to inject capital. 

Xuan Changneng, a deputy governor of the PBC, said in January that a variety of monetary tools, including interest rate adjustments and changes to the reserve requirement ratio, will be employed to maintain ample liquidity and support a loose social financing environment. 

The central bank will strengthen the implementation of interest rate policies, and further reduce the comprehensive social financing cost while maintaining the healthy operation of the financial industry, Xuan said. 

The report also noted that the central bank will increase support for the trade-in program, improve financial services in key consumption areas, and continue to stimulate consumption. It will also intensify efforts to revitalize the stock of commercial properties and the stock of land, promote the stabilization of the real estate market, improve the basic system of real estate financing, and help build a new model of real estate development.

Global Times