MNI BRIEF: PBOC Flags Accommodative Stance In 2026

The People's Bank of China will retain a moderately accommodative stance in 2026, flexibly utilising reserve requirement ratios and interest rate reductions and maintaining ample liquidity to support the economy, according to a statement on its website on Tuesday. 

The Bank will aim for ”a reasonable recovery in prices,” and guard against any overshooting of the yuan exchange rate, it stated. Structural tools will support domestic demand, technological innovation, and small and medium-sized enterprises, while relending facilities for services consumption and elderly care will promote credit in the services consumption sector, it said. (See MNI PBOC WATCH: LPR Steady As PBOC Cautious Despite Headwinds)

A mechanism for providing liquidity to non-bank financial institutions under specific scenarios will be established, and the role of the two monetary policy tools supporting the equity market will be leveraged, it noted. The digital yuan will be further developed and central bank currency swaps harnessed to facilitate use of the yuan in trade and investment, it said, noting that more eligible overseas entities are welcome to issue Panda bonds.