The PBOC released its 2Q26 Monetary Policy Implementation Report, saying it will
continue a moderately loose monetary stance, deploy policy tools to manage both
aggregate and structural liquidity, implement earlier measures and refine tools
design. It will step up financial support for expanding domestic demand,
technological innovation and small-and‑micro enterprises. The bank reaffirmed a
managed floating exchange rate against a basket, will maintain exchange-rate
flexibility and use the rate as an automatic stabilizer to support macro and
external balance, while taking measures to bolster FX-market resilience,
stabilize expectations and prevent exchange-rate overshooting to keep the
renminbi broadly stable at a reasonable equilibrium. The PBOC said it will
expand central bank macroprudential and financial stability functions, innovate
tools to maintain market orderly functioning and firmly prevent systemic
financial risks.
