PBoC Signals Targeted Support, No Major Easing

The People’s Bank of China pledged to roll out “practical and effective” policy support promptly, while avoiding signals of major easing. In its quarterly monetary policy report released Wednesday, the central bank said it will intensify countercyclical adjustments, boost domestic demand, and channel more resources toward technological innovation and smaller firms. It vowed to conduct overnight reverse repo operations more frequently to fine-tune short-term rates, and urged that loans and bond financing be assessed together rather than focusing solely on credit growth. The PBoC noted that capital-heavy sectors like real estate and infrastructure have cooled, while emerging “new productive forces” are more asset-light, reducing traditional loan demand. It also stressed that global monetary recalibration is not a “drastic U-turn,” warning that history shows rapid tightening after massive easing tends to deliver sharper shocks to markets.

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