PBOC Q3 Monetary Policy Committee Meeting: Comprehensively Employ and Timely Adjust Policy Tools to Keep Liquidity Ample

The Monetary Policy Committee (MPC) of the People's Bank of China (PBOC) held its third-quarter meeting of 2026 (the 114th in total) on September 19.

The meeting noted that since the beginning of this year, macro policies have been more proactive and effective, monetary policy has remained moderately loose, with counter-cyclical and cross-cyclical adjustments strengthened and multiple monetary policy tools employed in a comprehensive manner, creating an appropriate monetary and financial environment for the economy to keep improving. The reform efficacy of the loan prime rate (LPR) has continued to be released, the market-based adjustment mechanism for deposit rates has functioned effectively, monetary policy transmission efficiency has increased, and overall social financing costs are at historically low levels. Supply and demand in the forex market are basically balanced, the RMB exchange rate has floated in both directions and remained basically stable at a reasonable and equilibrium level, and financial markets have operated smoothly overall.

After analyzing domestic and international economic and financial conditions, the meeting held that the external environment has become more complex and volatile, global growth momentum remains weak, geopolitical conflicts and trade frictions are frequent, major economies are diverging in performance, and uncertainty persists in inflation trends and monetary policy adjustments. China's economy has run generally stable with new momentum and an improving structure, and high-quality development has achieved new results, but it still faces problems and challenges such as supply exceeding demand, structural divergence and external shocks. The meeting called for continuing to implement a moderately loose monetary policy, intensifying counter-cyclical adjustments, better leveraging the aggregate and structural functions of monetary policy tools, and strengthening coordination between monetary and fiscal policies to promote steady economic growth and a reasonable rebound in prices.

The meeting studied the main ideas for monetary policy in the next stage, suggesting that the integrated effect of incremental and existing policies should be leveraged, policies should be more forward-looking, flexible and targeted, and the intensity, pace and timing of policy implementation should be well calibrated in light of domestic and international economic and financial conditions and financial market developments. Monetary policy tools should be comprehensively employed and adjusted in a timely manner to keep liquidity ample, so that growth in aggregate financing and money supply matches economic growth and expected targets for the overall price level. The reform and improvement of the monetary policy operational framework should be advanced. Credit market operations should be regulated and intermediate financing costs reduced to keep overall social financing costs running low. Bond market operations should be observed and assessed from a macroprudential perspective, with attention paid to changes in long-term yields. Monetary policy transmission mechanisms should be unblocked to improve the efficiency of capital use. The decisive role of the market in exchange rate formation should be upheld, the resilience of the forex market enhanced and market expectations stabilized, while guarding against herd behavior and the self-reinforcement of irrational expectations, so as to keep the RMB exchange rate basically stable at a reasonable and equilibrium level.

The meeting pointed out that large banks should be guided to play a leading role in financial services for the real economy, small and medium-sized banks should focus on their main responsibilities and core businesses, and banks' capital strength should be enhanced. All types of structural monetary policy tools should be used well, tool design and management continuously improved, the "five major articles" of finance solidly delivered, and financial support strengthened for key areas such as expanding domestic demand, scientific and technological innovation, small and medium-sized enterprises and micro businesses, and the construction of the "six networks." Financial services supporting the development and growth of the private economy should continue to be improved. The stable operation of financial markets should be maintained. High-level two-way financial opening-up should be earnestly advanced, and the capacity for economic and financial management and risk prevention and control under open conditions enhanced.

The meeting emphasized the need to be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the guiding principles of the Fourth Plenary Session of the 20th CPC Central Committee, the Central Economic Work Conference and the national Two Sessions, follow the decisions and arrangements of the CPC Central Committee and the State Council, firmly grasp high-quality development as the primary task, and solidly advance Chinese modernization. The new development philosophy should be fully and faithfully implemented and the new development pattern accelerated, balancing aggregate supply and demand, working harder to expand domestic demand and optimize supply, speeding up the transformation of old and new growth drivers, strengthening the endogenous momentum of economic development, further strengthening the domestic circulation, improving the mutual reinforcement of the domestic and international circulations, and promoting sustained, new and sound economic development.

The meeting was chaired by Pan Gongsheng, Governor of the PBOC and Chairman of the MPC. MPC members Liao Min, Xuan Changneng, Zou Lan, Ding Xiangqun, Wu Qing, Kang Yi, Zhu Hexin, Gu Shu, Wang Yiming, Huang Yiping and Huang Haizhou attended the meeting. Xu Shouben and Li Chunlin were absent due to official duties. Officials in charge from the PBOC's Heilongjiang, Zhejiang, Anhui and Shaanxi provincial branches and the Ningxia Hui Autonomous Region branch attended as observers.