The PBOC held its H2 2026 work meeting and said it will continue a moderately loose monetary stance. It will use reverse repos, the Medium-term Lending Facility (MLF) and government bond operations to provide short-, medium- and long-term liquidity, keep liquidity ample and guide banks to support effective financing demand from the real economy. The central bank will refine short-end rate control, add overnight reverse-repo instruments, narrow the temporary overnight repo rate corridor, and stre

The PBOC held its H2 2026 work meeting and said it will continue a moderately loose monetary stance. It will use reverse repos, the Medium-term Lending Facility (MLF) and government bond operations to provide short-, medium- and long-term liquidity, keep liquidity ample and guide banks to support effective financing demand from the real economy. The central bank will refine short-end rate control, add overnight reverse-repo instruments, narrow the temporary overnight repo rate corridor, and strengthen execution and supervision of rate policy, urging financial institutions to disclose loan comprehensive financing costs to keep overall social financing costs low. At end-June outstanding social financing was up 7.4% YoY and M2 rose 8.0% YoY. The PBOC reiterated that market forces will decide the exchange rate and the RMB will be allowed to fluctuate two-way.