China’s Central Bank reveals monetary policy focus for 2025

4th January 2025 – (Beijing)

China’s central bank has articulated its monetary and financial priorities for 2025 following a two-day meeting that concluded on Saturday. The People’s Bank of China (PBOC) emphasized the importance of expanding domestic demand, stabilizing market expectations, and invigorating economic vitality to foster continuous improvement in the nation’s economy.

The PBOC announced plans to adopt a moderately loose monetary policy in 2025 aimed at mitigating financial risks in critical areas while advancing financial reforms and promoting a high-standard opening to global markets.

In detailing its monetary strategy for the year, the central bank underscored the intention to create a conducive monetary and financial environment that supports stable economic growth. It will utilize a combination of monetary policy tools to adjust the reserve requirement ratio and interest rates as appropriate, taking into account both domestic and international economic conditions as well as financial market dynamics.

The PBOC also emphasized the need to maintain ample liquidity and gradually enhance financial supply, ensuring that the growth of social financing and money supply aligns with targets for economic growth and overall price stability.

Moreover, the meeting highlighted the importance of optimizing the use of existing financial resources and improving fund efficiency. The PBOC will also work to keep the yuan’s exchange rate stable at a balanced level, aiming to prevent excessive fluctuations in the currency.

Summary
China’s c.bank says it will cut RRR, interest rates at proper time
Monetary policy committee suggests strengthening adjustment
China 10-and 30-year treasury yields both hit record lows

China’s central bank said it will cut banks’ reserve requirement ratio and interest rates at “proper time” during a quarterly meeting of its monetary policy committee held last week, according to a statement published on Friday.
The committee of the People’s Bank of China (PBOC), suggested strengthening monetary policy adjustments and adopting a more forward-looking, targeted and effective approach, according to the fourth quarter meeting held on Dec. 27.

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