The People's Bank of China indicated on the 12th that it will maintain a moderately accommodative monetary stance and introduce effective additional measures as needed. In its quarterly monetary policy implementation report, it stated that while maximizing the use of existing policies, it will swiftly formulate and introduce additional measures, strengthen counter-cyclical adjustments to respond to economic cycles, and promote the expansion of domestic demand. It did not explicitly mention cuts to policy interest rates or the reserve requirement ratio. It pointed out that the domestic economy faces an imbalance of robust supply but weak demand, and against the backdrop of second-quarter 2026 GDP growth coming in at 4.3 percent year-on-year, below the lower bound of the government's target, it expressed the intention to strengthen coordination between monetary and fiscal policies.
PBOC maintains accommodative stance and signals additional easing, which typically lowers bond yields.
