Pan Gongsheng: Continuously enrich the monetary policy toolkit, improve the basic money supply mechanism for short-, medium- and long-term combinations.

Pan Gongsheng, Governor of the People's Bank of China, stated at the Economic Theme Press Conference of the Fourth Session of the Fourteenth National People's Congress that the People's Bank of China will implement the "Fifteen-Five" planning outline deployment, construct a scientific and stable monetary policy system, and effectively manage the relationships between short-term and long-term, growth and risk prevention, and internal and external factors in order to coordinate and advance various aspects of monetary policy targets, tools, and transmission. In terms of monetary policy targets, China's current monetary policy utilizes a combination of quantity-based and price-based regulation. In the future, the emphasis will gradually shift away from quantity-based intermediate targets, with financial aggregate serving more as an observational, referential, and anticipatory indicator to create conditions for enhancing the effectiveness of interest rate control. Regarding monetary policy tools, the toolbox of monetary policy will continue to be enriched, and mechanisms for short, medium, and long-term basic money supply will be improved. The policy rate effect of the 7-day reverse repurchase rate in the open market will be utilized to guide short-term money market rates to align better with policy rates. Government bond transactions will continue, and the reserve requirement system will be improved. Focusing on key areas, balancing appropriately, making progress while allowing retreat, and optimizing the structural monetary policy tool system. In terms of transmission mechanisms, a sound market-based mechanism for interest rate formation, regulation, and transmission will be established to facilitate the transmission from policy rates to market benchmark rates and then to various financial market rates. The policy communication mechanism will be improved continuously to enhance the transparency of monetary policy.