FX.co ★ China Signals Further RRR and Interest Rate Cuts to Support Growth

The People's Bank of China (PBOC) is set to maintain a moderately loose monetary policy into 2026, employing strategies such as reserve requirement ratio (RRR) reductions and interest rate cuts to ensure adequate liquidity, stated central bank governor Pan Gongsheng, per Xinhuanet's report. The monetary strategy will aim to foster stable economic growth and a sensible recovery in prices, leveraging both new and existing initiatives to create an optimal financial and monetary environment conducive to high-quality development and the smooth functioning of financial markets, Pan mentioned in an interview with Xinhua. “There remains the potential for additional RRR and interest rate cuts this year,” he noted, stressing that the PBOC will focus on the thorough implementation and supervision of interest rate policies to maintain low overall financing costs. Additionally, the central bank intends to enhance the flexibility of its monetary policy tools.