China's central bank announced on Tuesday its plan to reduce the reserve requirement ratio and interest rates by 2026 to ensure ample liquidity and to maintain a suitably lax monetary policy, as detailed in a statement on its website. The People's Bank of China (PBOC) stated its intention to enhance both counter-cyclical and cross-cyclical adjustments, mitigate financial risks in critical areas, and work towards boosting domestic demand. Additionally, the bank emphasized the strategic use of refinancing tools to bolster services consumption and elderly care, thereby fostering increased credit allocation in the services sector. Key priorities include containing financial risks within essential sectors and establishing a mechanism to provide liquidity to non-banking institutions under certain conditions. The PBOC also committed to maintaining the yuan's exchange rate at a stable, reasonable, and balanced level, while safeguarding against the potential risk of significant currency fluctuations.