Pan Gongsheng: This year will flexibly and efficiently use a variety of monetary policy tools such as reserve requirement ratio cuts and interest rate cuts.

Caixin Financial News on March 6th reported that the Fourth Session of the Fourteenth National People's Congress held a press conference at the Media Center News Conference Hall of the Mei Di Ya Center at 3 p.m. today. The conference invited the Director of the National Development and Reform Commission Zheng Zhijie, Minister of Finance Lian Fuan, Minister of Commerce Wang Wentao, Governor of the People's Bank of China Pan Gongsheng, and Chairman of the China Securities Regulatory Commission Wu Qing to answer questions from Chinese and foreign journalists on issues related to development and reform, fiscal budget, commerce, finance, and securities. The following is the main content of Pan Gongsheng's responses to the journalists: This year will flexibly and efficiently use various monetary policy tools such as reserve requirement cuts and interest rate cuts Pan Gongsheng, the Governor of the People's Bank of China, stated at the press conference that this year will flexibly and efficiently use various monetary policy tools such as reserve requirement cuts and interest rate cuts. In the past two months, about 2 trillion yuan of long-term funds were injected into the open market Pan Gongsheng stated that in the past two months, about 2 trillion yuan of long-term funds were injected into the open market through various tools. Overall, the financing conditions in society are loose, and the overall financial supply is growing reasonably. Strengthen regulations to reduce market behaviors that undermine the transmission effectiveness of monetary policies Pan Gongsheng stated that based on changes in the economic and financial situation and the operation of the macro-economy, efforts will be made to guide and regulate interest rates, promote the low comprehensive financing cost of society, strengthen the implementation and supervision of interest rate policies, and strengthen regulations on market behaviors that are irrational and undermine the transmission effectiveness of monetary policies. Banks are required to clearly display the annualized comprehensive financing cost of loans to enterprises and regulate financing intermediation fees. Comprehensively use short-, medium-, and long-term policy tools to ensure market liquidity Pan Gongsheng stated that in 2026, the People's Bank of China will implement a moderately loose monetary policy, employing various monetary policy tools such as reserve requirement cuts and interest rate cuts flexibly and efficiently. Incremental and stock monetary policies and fiscal policies will be integrated and synergized. In terms of quantity, comprehensive use of short-, medium-, and long-term policy tools will ensure market liquidity, enabling the growth of social financing and currency supply to match the expected goals of economic growth and price levels. China has no intention of depreciating the currency to gain trade competitive advantage Pan Gongsheng stated that the renminbi has appreciated against the US dollar since the beginning of this year, which is related to the continued improvement of China's economy, the weakening of the US dollar index, and seasonal enterprise currency settlement. Currently, the bilateral exchange rate of the renminbi against the US dollar is within the mid-range of recent years. China has no intention of depreciating the currency to gain a trade competitive advantage. Improve policy communication mechanisms and continuously enhance the transparency of monetary policy Pan Gongsheng stated that in terms of transmission mechanisms, it is necessary to improve market-oriented interest rate formation, regulation, and transmission mechanisms, ensure the transmission of policy rates to market benchmark rates, and then to various financial market rates. Improve policy communication mechanisms and continuously enhance the transparency of monetary policy. Future monetary policies will gradually reduce quantity-based targets Pan Gongsheng stated that China's current monetary policy adopts both quantity-based and price-based controls. In the future, quantity-based intermediate targets will gradually fade, and financial quantity will be used more as observational, referential, and anticipative indicators, creating conditions for better utilization of interest rate controls. Low comprehensive financing costs and historically low interest rates for new corporate and personal housing loans Pan Gongsheng stated at the Economic Theme Press Conference of the Fourth Session of the Fourteenth National People's Congress that the overall financing conditions are loose, with the financial supply growing reasonably, and the low operation of comprehensive financing costs in society. In January, the weighted average interest rates for new corporate loans and individual housing loans were 3.2% and 3.1%, respectively, at historically low levels. Continue to conduct government bond repurchase operations and improve the deposit reserve system Pan Gongsheng stated at the Economic Theme Press Conference of the Fourth Session of the Fourteenth National People's Congress that it is necessary to enrich the monetary policy toolbox, perfect the basic currency injection mechanism for short-, medium-, and long-term coordination, leverage the policy rate effects of the 7-day reverse repurchase operations market, guide short-term market interest rates to operate around policy rates, continue government bond repurchase operations, and improve the deposit reserve system. Focus on key points, reasonably and moderately, optimize the structural monetary policy tool system. This article was reprinted from Caixin Media, GMTEight Editor: Chen Wenfang.