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China's central bank pledged to adjust monetary policy tools ‌in a timely manner and facilitate panda ​bond issuance, a ‌statement showed on Sunday. The People's Bank ‌of ⁠China (PBoC) will ‌continue to implement an appropriately ‌loose monetary policy and maintain ample liquidity, according ⁠to the readout of a work meeting on Saturday to map out the second half of the year.The PBoC statement pledged to "steadily promote the high-level opening of the financial market... advance domestic and international infrastructure cooperation, ​and enrich liquidity management and risk hedging tools." It would "continue to financially support debt risk resolution of local government financing ‌vehicles, and promote their market-oriented ⁠transformation," it ​added. As well as supporting more overseas ​institutions issuing yuan-denominated bonds, known as panda bonds, the central bank would help Shanghai enhance cross-border finance and offshore financial services, and consolidate Hong Kong's position as an offshore yuan hub, the statement said.The meeting, headed by PBoC Governor Pan Gongsheng, followed a call by the Communist Party's Politburo on ‌Thursday to accelerate the ‌pace of fiscal ⁠spending on already budgeted infrastructure projects in the ⁠remainder of the ⁠year. Data released last month showed economic growth at 4.3% in the second quarter, its slowest in more than three years and missing the lower end of a full-year target of 4.5% ​to 5.0%. The Politburo, a top party decision-making body, acknowledged "difficulties and challenges facing the economy" at its meeting, the official Xinhua news agency said. China must "accelerate the pace of fiscal expenditure" and enhance the flexibility and forward-lookingness of monetary policy, a summary of the discussion showed.

China’s central bank reaffirmed its supportive monetary policy stance while signalling continued caution toward aggressive stimulus, reinforcing a shift toward securing long-term stability over immediate fixes.The People’s Bank of China (PBoC) vowed to guide borrowing costs to continue hovering at a low level, according to a Wednesday statement following its fourth-quarter monetary policy committee meeting. The bank repeated a pledge to step up “cross-cyclical” policies, a phrase suggesting it aims to look beyond short-term volatility and avoid excessive stimulus that could create structural imbalances.The statement didn’t mention a reduction in interest rates or to the reserve requirement ratio, which determines how much cash banks must keep in reserves, while the PBoC pledged to make use of multiple policy tools. That suggests the central bank is cautious about taking those big easing steps, even after a readout following a key annual economic work conference included a reference to those measures earlier this month.The language suggests “a preference toward a reactive rather than proactive approach to easing,” Goldman Sachs Group Inc economist Xinquan Chen said in a note Thursday. Changes in the language “point to a more cautious and flexible approach to monetary policy easing”, he said.This measured approach comes despite deepening weakness in domestic demand, with retail sales last month expanding at the lowest pace since the crash caused by Covid. Fixed-asset investment is also on track for its first annual decline in data going back to 1998, after a crash made worse by a drought in funding for infrastructure projects.The committee said it will “grasp the strength, pace and timing” of policy implementation based on evolving domestic and overseas conditions. The PBoC also reiterated its commitment to maintaining the yuan’s basic stability at a reasonable and balanced level to guard against overshooting risks.The PBoC has adopted a cautious approach this year, frequently disappointing economists who had anticipated more aggressive interest rate cuts. This restraint reflects the central bank’s deeper concerns over protecting shrinking bank margins and preserving policy space for future downturns.While the meeting readout mentioned maintaining “ample” liquidity, the focus on “quality and efficiency” over raw volume suggests that any further easing will be mostly targeted.The PBoC will likely cut the RRR by 50 basis points in the first quarter to maintain ample liquidity and ensure government borrowing costs stay low, economists at China Galaxy Securities Co wrote in a report on Thursday.While it may cut the policy interest rate by 10 to 20 basis points in 2026, any reduction may only be triggered by an increase in economic pressure, such as a deterioration in the US-China relationship or worsening unemployment, they said.