FX.co ★ PBoC Signals Targeted Support, No Major Easing

The People’s Bank of China has pledged to introduce “practical and effective” policy support in a timely manner, while stopping short of signaling any large-scale easing. In its quarterly monetary policy report released Wednesday, the central bank said it will step up countercyclical adjustments, stimulate domestic demand, and direct more resources toward technological innovation and smaller enterprises. It also committed to conducting overnight reverse repo operations more frequently to fine-tune short-term interest rates, and called for loans and bond financing to be evaluated together, rather than relying solely on credit growth as the key metric.

The PBoC noted that capital-intensive sectors such as real estate and infrastructure have cooled, while emerging “new productive forces” tend to be more asset-light, thereby reducing traditional loan demand. The bank further emphasized that the ongoing global monetary policy recalibration does not amount to a “drastic U-turn,” cautioning that history shows rapid tightening following large-scale easing typically inflicts more severe shocks on financial markets.