BEIJING, Aug 12 - China’s central bank said on Wednesday it will maintain an appropriately loose monetary stance and is prepared to deploy practical and effective measures as required, but it stopped short of signalling explicit reductions to policy interest rates or banks’ reserve-requirement ratio.
In its quarterly monetary policy implementation report, the People’s Bank of China said it will make full use of existing policies and promptly plan and roll out additional measures where needed. The central bank said it will step up counter-cyclical adjustment and intensify efforts to expand domestic demand.
The report also said monetary policy will be more closely coordinated with fiscal policy to support economic growth and to help ensure the stable operation of the financial market. The document stressed that the groundwork for sustaining steady and positive economic momentum has yet to be fully consolidated.
"The foundation for the economy’s steady, positive momentum still needs to be consolidated," the central bank said.
On the international front, the central bank described the global environment as complex and volatile, citing weak global growth, slowing trade and imported inflationary pressures that have pushed up prices in many countries. Domestically, the central bank noted a persistent imbalance between strong supply and weak demand, saying new challenges have compounded longstanding problems.
At a July leadership meeting, China’s top officials pledged to support the slowing economy by accelerating fiscal spending on infrastructure projects that are already budgeted for the second half of the year, rather than by introducing major new stimulus measures. The central bank highlighted that second-quarter gross domestic product slowed to 4.3 percent, the weakest pace in more than three years and below the lower bound of the government’s 4.5 percent to 5.0 percent full-year target range.
Despite the slowdown in the second quarter, the central bank noted that a stronger-than-expected start to the year has given Beijing some latitude to refrain from a more forceful policy response, analysts say. The report frames the approach as one of targeted, coordinated action rather than broad-based cuts to monetary policy instruments.
The central bank’s language underscores a dual focus: readiness to act with calibrated measures and a preference for aligning monetary tools with fiscal efforts to stabilise growth and support orderly financial-market functioning.