CITIC Securities says the PBOC's Q2 2026 monetary report sets domestic tone as
"stable operation, shifting to new and better quality" and flags geopolitical
risks and AI on the external front. The report calls for "comprehensive use and
timely adjustment of monetary policy tools," indicating a slightly more active
policy bias. It urges guiding short-term funding rates to trade around the
policy rate and promotes diversification of loan pricing benchmarks to lower
financing costs. CITIC concludes the PBOC may continue to increase financial
support for the real economy in the next phase.
