Central Bank: Strengthen the consistency of macroeconomic policy orientations and make countercyclical and cross-cycle adjustments

The Zhitong Finance App learned that on November 11, the Central Bank of China released China's monetary policy implementation report for the third quarter of 2025. The report mentioned that at present, there are many external instability and uncertainties, the international economic and trade order is facing serious challenges, the momentum for world economic growth is insufficient, the economic performance of major economies is fragmented, China's economic operation is still facing many risks and challenges, and the foundation for a positive domestic economy still needs to be strengthened. At the same time, China's economy has a stable foundation, many advantages, strong resilience and great potential. Long-term positive support conditions and basic trends have not changed. It is necessary to maintain strategic strength, enhance confidence in victory, and push for major breakthroughs in strategic tasks relating to the overall Chinese modernization.

In the next stage, the People's Bank of China will adhere to Xi Jinping's ideology of socialism with Chinese characteristics in the new era, fully implement the spirit of the 20th National Congress and the Central Economic Work Conference, adhere to the general tone of steady progress, fully, accurately, and comprehensively implement the new development concept, unswervingly follow the path of financial development with Chinese characteristics, further deepen financial reform and high-level opening-up to the outside world, accelerate the construction of a financial power, improve the central banking system, and establish a scientific and stable monetary policy system and a comprehensive macroprudential management system covering the transmission of monetary policy. Balance the short term and long term, steady growth and risk prevention, internal balance and external balance, support the relationship between supporting the real economy and maintaining the banking system's own health, strengthen the consistency of macroeconomic policy orientation, do countercyclical and cross-cycle adjustments, improve the effectiveness of macroeconomic governance, and continue to grow steadily, stabilize employment, and stabilize expectations.

Summary of contents:

China Monetary Policy Implementation Report for the Third Quarter of 2025

Since this year, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core, the national economy has withstood pressure and continued its steady and progressive development trend. High-quality development has achieved positive results. The main economic indicators are generally stable, showing strong resilience and vitality. The gross domestic product (GDP) grew 5.2% year over year in the first three quarters. The People's Bank of China adheres to Xi Jinping's ideology of socialism with Chinese characteristics in the new era, earnestly implements the decisions and arrangements of the Party Central Committee and the State Council, implements a moderately loose monetary policy, maintains abundant liquidity, and comprehensively uses various monetary policy tools such as quantity, price, and structure to create an appropriate monetary and financial environment for the economic recovery and stable operation of the financial market.

The first is to maintain a reasonable growth in monetary credit. Comprehensive use of tools such as open market operations, medium-term loan facilitation, refinancing and rediscounting to maintain abundant liquidity. Guide financial institutions to fully meet the real economy's effective credit needs, improve the efficiency of the use of funds, and improve the quality and efficiency of services to the real economy. The second is to push the cost of comprehensive social financing down. Improve the market-based interest rate regulation framework, strengthen the implementation of interest rate policies, effectively play the role of a self-regulatory mechanism for market interest rate pricing, and drive interest rates on deposits and loans downward. The third is to guide credit restructuring and optimization. Make good use of the 500 billion yuan service reloan and the newly added reloan amount for scientific and technological innovation and technological transformation, give full play to the role of science and technology innovation bonds as a risk-sharing tool, strengthen support to boost key domestic demand areas such as consumption and scientific and technological innovation, implement sustainable structural monetary policy tools, and continue to do a good job in the “five major articles” of finance. Fourth, keep the exchange rate basically stable. Insist that the market plays a decisive role in the formation of exchange rates, give full play to the macroeconomic and balance of payments adjustment function of the exchange rate, adopt comprehensive measures to promote stable expectations, and maintain the basic stability of the RMB exchange rate under complex circumstances. Fifth, strengthen risk prevention and mitigation. Resolve financial risks in key areas in a steady and orderly manner, and continuously improve financial risk monitoring, evaluation and early warning systems.

The effects of countercyclical adjustment of monetary policy are gradually showing. Total financial volume grew reasonably. At the end of September, the stock of large-scale social financing and the broad money supply (M2) increased by 8.7% and 8.4%, respectively, over the same period last year, with a loan balance of RMB 270.4 trillion. Social financing costs are low. Interest rates on new corporate loans and personal housing loans issued in September fell by about 40 and 25 basis points, respectively, over the same period last year. The credit structure was continuously optimized, and the RMB exchange rate remained basically stable at a reasonable equilibrium level. At the end of September, the central price of the RMB exchange rate against the US dollar appreciated by 1.2% compared to the end of the previous year.

Currently, there are many external instability and uncertainties. The international economic and trade order is facing serious challenges. The momentum for world economic growth is insufficient, and the economic performance of major economies is fragmented. China's economic operation still faces many risks and challenges, and the foundation for a positive domestic economy still needs to be strengthened. At the same time, China's economy has a stable foundation, many advantages, strong resilience and great potential. Long-term positive support conditions and basic trends have not changed. It is necessary to maintain strategic strength, enhance confidence in victory, and push for major breakthroughs in strategic tasks relating to the overall Chinese modernization. In the next stage, the People's Bank of China will adhere to Xi Jinping's ideology of socialism with Chinese characteristics in the new era, fully implement the spirit of the 20th National Congress and the Central Economic Work Conference, adhere to the general tone of steady progress, fully, accurately, and comprehensively implement the new development concept, unswervingly follow the path of financial development with Chinese characteristics, further deepen financial reform and high-level opening-up to the outside world, accelerate the construction of a financial power, improve the central banking system, and establish a scientific and stable monetary policy system and a comprehensive macroprudential management system covering the transmission of monetary policy. Balance the short term and long term, steady growth and risk prevention, internal balance and external balance, support the relationship between supporting the real economy and maintaining the banking system's own health, strengthen the consistency of macroeconomic policy orientation, do countercyclical and cross-cycle adjustments, improve the effectiveness of macroeconomic governance, and continue to grow steadily, stabilize employment, and stabilize expectations.

Implement a moderately loose monetary policy. Make comprehensive use of various tools to keep social financing conditions relatively relaxed, and at the same time continue to improve the monetary policy framework and strengthen the implementation and transmission of monetary policy. Maintain abundant liquidity, match the scale of social financing and money supply growth with the expected goals of economic growth and overall price levels, and continue to create an appropriate monetary and financial environment. Promoting a reasonable recovery in prices is an important consideration in grasping monetary policy to keep prices at a reasonable level. Further improve the interest rate regulation framework, strengthen the central bank's policy interest rate guidance, improve the market-based interest rate formation and transmission mechanism, give full play to the role of a self-regulatory mechanism for market interest rate pricing, strengthen the implementation and supervision of interest rate policies, reduce bank debt costs, and promote the reduction of comprehensive social financing costs. Give full play to the dual functions of monetary policy instruments, implement all kinds of structural monetary policy tools, solidly prepare the “Five Major Articles” on finance, and strengthen support for key directions such as scientific and technological innovation, boosting consumption, small and micro enterprises, and stabilizing foreign trade. Adhere to a managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies, maintain exchange rate flexibility, strengthen guidance on expectations, prevent the risk of exchange rate overadjustment, and maintain the basic stability of the RMB exchange rate at a reasonable equilibrium level. Explore and expand the central bank's macroprudential and financial stability functions, maintain financial market stability, and firmly adhere to the bottom line that systemic financial risks do not occur.

This article was edited from the official website of the People's Bank of China; Zhitong Finance Editor: Chen Xiaoyi.