PBOC released June financial data yesterday. Shenwan Hongyuan chief economist
Zhao Wei said monetary policy will use forward-looking, flexible and targeted
liquidity operations—calibrated to domestic and external economic and financial
conditions—to balance risk control and growth. The central bank has stepped up
liquidity: July net outright reverse repo injection CNY 700 bln; end-June MLF
net injection CNY 200 bln. If China’s domestic demand recovery remains fragile,
fiscal and monetary policy could coordinate measures, including new policy
financial instruments, to bolster macro resilience.