People’s Bank of China
Updated
Summary
The People's Bank of China (PBOC) is China's central bank. It sets monetary policy under the State Council, manages the renminbi exchange rate, and oversees foreign-exchange reserves through the State Administration of Foreign Exchange (SAFE). Pan Gongsheng is Governor and chairs its Monetary Policy Committee, which met for the 114th time on 2026-09-19. Its key policy rate is the 7-day reverse repo rate, cut to 1.40% in May 2025. Banks price loans off the loan prime rate (LPR), set monthly by 20 quoting banks under PBOC authority and held at 3.0% (1-year) and 3.5% (5-year-plus) on 2026-09-20. Beyond rates it uses reserve requirements, liquidity operations and targeted relending, and it issues the e-CNY digital currency. Its stated stance since 2025 is 'moderately accommodative', aiming at stable growth and a 'reasonable recovery in prices' while keeping the renminbi 'basically stable'.
Key numbers
7-day reverse repo rate (key policy rate): 1.40% (set 2025-05-08; no later change found by AA; current level not re-read on pbc.gov.cn) (as of 2025-05-08). Source: gov.cn
Loan prime rate: 1-year / 5-year-plus: 3.0% / 3.5% (unchanged since 2025-10-20 at least; October 2026 fixing UNKNOWN from a primary source) (as of 2026-09-20). Source: chinamoney.com.cn
Relending 1-year rate / PSL 1-year rate: 1.25% (from 2026-01-19) / 1.5% (from 2026-09-29) (as of 2026-09-29). Source: english.www.gov.cn
M2 / M1, end-September 2026, y/y: 359.63 trn yuan (+7.2%) / 116.76 trn yuan (+3.2%) (as of 2026-09-30). Source: jrj.sh.gov.cn
Total social financing stock, end-September 2026: 468.17 trn yuan (+7.1% y/y); Jan-Sep flow 27.46 trn (2.63 trn less y/y) (as of 2026-09-30). Source: jrj.sh.gov.cn
RMB loans: Jan-Sep 2026 increase / balance growth: 11.52 trn yuan / +4.8% y/y (283.44 trn) (as of 2026-09-30). Source: jrj.sh.gov.cn
New corporate / mortgage loan rates, June 2026: about 3.0% (-20 bp y/y) / about 3.1% (as of 2026-06-30). Source: jrj.sh.gov.cn
CPI / core CPI / PPI, September 2026, y/y: 0.9% / 1.0% / 5.0% (as of 2026-09-30). Source: stats.gov.cn
Foreign-currency reserves / gold holdings (SAFE): USD 3,400.25B / 77.47M oz (as of 2026-09-30). Source: safe.gov.cn
USD/CNY central parity: 6.7200 (as of 2026-10-20). Source: safe.gov.cn
Forward FX sales risk reserve ratio: 0% (from 20%, effective 2026-03-02) (as of 2026-03-02). Source: jrj.wuhan.gov.cn
e-CNY cumulative transactions (end-November 2025): 3.48 billion, 16.7 trn yuan (as of 2025-11-30). Source: english.www.gov.cn
Timeline
2026-10-20 — CFETS central parity at 6.7200 per US dollar, firmer than 6.7351 on 2026-09-30. (Source: safe.gov.cn)
2026-10-15 — PBOC Q1-Q3 data: M2 +7.2%, TSF stock +7.1%, loans +4.8%; Jan-Sep TSF flow 2.63 trn yuan below 2025. (Source: jrj.sh.gov.cn)
2026-10-15 — NBS: September PPI +5.0% y/y, driven by purchase prices up 6.9%; CPI was 0.9% (released 2026-10-14). (Source: stats.gov.cn)
2026-10-08 — SAFE: FX reserves USD 3,400.25B at end-September; gold up to 77.47M oz, an eighth straight monthly rise since January. (Source: safe.gov.cn)
2026-09-29 — PSL rate cut from 1.75% to 1.5%; sci-tech, small-business and private-firm relending quotas raised. (Source: english.www.gov.cn)
2026-09-20 — LPR unchanged at 3.0% (1-year) and 3.5% (5-year-plus). (Source: chinamoney.com.cn)
2026-09-19 — Q3 MPC meeting: 'moderately accommodative' stance, ample liquidity, watch long-term yields; no RRR or rate cut named. (Source: jrj.sh.gov.cn)
2026-08-13 — Q2 Monetary Policy Report: June corporate loan rates about 3.0%; RMB/USD 6.7852 at end-June, about 3% stronger than end-2025. (Source: jrj.sh.gov.cn)
2026-08-10 — PBOC issues its 2026-2030 reform and development plan (RMB internationalisation, CIPS, rate transmission). (Source: english.www.gov.cn)
2026-07-07 — Pan Gongsheng in Hong Kong: southbound Bond Connect quota to RMB 800B, RMB Business Facility to RMB 500B. (Source: bis.org)
2026-07-04 — Q2 MPC meeting keeps the 'moderately accommodative' stance and 'reasonable recovery in prices' goal. (Source: jrj.sh.gov.cn)
2026-06-17 — Lujiazui Forum: six measures; overnight repo corridor narrowed to 7-day rate plus or minus 25 bp. (Source: bis.org)
2026-03-05 — Government Work Report: appropriately accommodative policy, including RRR and interest-rate cuts as tools. (Source: english.www.gov.cn)
2026-03-02 — Forward FX sales risk reserve ratio cut from 20% to 0. (Source: jrj.wuhan.gov.cn)
2026-01-22 — Pan Gongsheng: 'still room for further RRR and interest rate cuts this year'. (Source: english.www.gov.cn)
2026-01-15 — Structural-tool rates cut 0.25 points from 2026-01-19 (relending 1.25%); 1 trn yuan private-enterprise relending line. (Source: english.www.gov.cn)
2026-01-01 — e-CNY in bank wallets becomes interest-bearing deposit money covered by deposit insurance. (Source: english.www.gov.cn)
2025-09-25 — e-CNY international operation center opens in Shanghai with three platforms. (Source: english.www.gov.cn)
2025-05-08 — Last policy-rate cut found: 7-day reverse repo 1.5% to 1.4%; 0.5-point RRR cut followed on 2025-05-15. (Source: gov.cn)
Key actors and links
China (country:china): The PBOC is China's central bank; its policy responds to weak domestic demand and low core inflation.
Chinese renminbi (asset:cny): The PBOC manages the renminbi through the daily central parity (6.7200 per dollar on 2026-10-20) and FX-market tools.
Deflation (theme:deflation): The PBOC's stated goal is a 'reasonable recovery in prices'; CPI is 0.9% and core 1.0%, after a period of very low prices.
GDP growth (theme:gdp-growth): PBOC easing is framed as support for the 2026 growth target of 4.5% to 5%.
Trade balance (theme:trade-balance): Large trade surpluses add FX inflows that shape RMB strength and the PBOC's reserve and FX operations.
Foreign exchange reserves (theme:foreign-exchange-reserves): SAFE, under the PBOC, reports USD 3,400.25 billion in foreign-currency reserves at end-September 2026.
Gold (commodity:gold): Official gold holdings rose each month from January to September 2026, to 77.47 million ounces.
Gold Accumulation (theme:gold-accumulation): The PBOC is a steady official gold buyer through 2026 per SAFE's monthly reserve data.
CBDC (theme:cbdc): The PBOC issues the e-CNY, made interest-bearing deposit money in bank wallets from 2026-01-01.
mBridge (actor:mbridge): The PBOC's Digital Currency Institute is a founding participant of mBridge, now run by the partners after the BIS exit.
BIS (actor:bis): The BIS publishes PBOC governor speeches and incubated mBridge until handing it over in October 2024.
China, Hong Kong Special Administrative Region (country:china-hong-kong-special-administrative-region): Hong Kong is the PBOC's main offshore RMB hub (over 70% of cross-border RMB payments, per Pan Gongsheng).
De-dollarization (theme:de-dollarization): The PBOC's 2026-2030 plan and Hong Kong measures push wider international RMB use and CIPS.
Federal Reserve (actor:federal-reserve): The Fed's rate path shapes the dollar side of USD/CNY and so the room the PBOC has to ease.
Why it matters now
The PBOC is easing, but mostly through targeted tools rather than headline rate cuts. The mechanism starts with weak domestic demand: the PBOC's own MPC said in September 2025 that China faced insufficient domestic demand and persistently low price levels. In January 2026 both Pan Gongsheng and Deputy Governor Zou Lan said there was still room to cut the RRR and interest rates in 2026, and the March Government Work Report listed such cuts as tools. Yet AA found no PBOC notice of a policy-rate or broad RRR cut since May 2025, and the LPR has stayed at 3.0% and 3.5%. Instead the PBOC cut structural-tool rates by 0.25 points in January (relending 1.25%), cut the PSL rate to 1.5% on 2026-09-29, and raised relending quotas for technology, small firms and private firms. Credit growth keeps slowing: at end-September loans grew 4.8% and total social financing 7.1%, and the January-September financing flow was 2.63 trillion yuan smaller than in 2025. Pan has called slower but better-allocated credit a possible 'new normal'.
Two constraints changed in 2026. First, prices: CPI was 0.9% in September and PPI 5.0%, the latter driven by imported oil, coal and metals, so the old deflation framing fits core prices (1.0%) better than headline ones. Second, the currency: the renminbi strengthened about 3% against the dollar in the first half and the central parity was 6.7200 on 2026-10-20. In March the PBOC cut the risk reserve on forward FX sales from 20% to 0. Inference (AA): that reserve raised the cost of hedging against a weaker yuan, so removing it while the yuan is firm suggests the exchange rate is less of a brake on easing than when the reserve was needed. The likelier brakes are bank margins (not quantified here: UNKNOWN), long-term bond yields, which the MPC says it watches, and import-led factory inflation. SAFE data show gold holdings rising each month from January to September 2026, to 77.47 million ounces, and the PBOC is widening offshore RMB use through Hong Kong and its 2026-2030 reform plan.
Risks and open questions
Bull case: The PBOC keeps saying it has room to ease, and it is using it in targeted form: structural-tool rates cut in January, the PSL rate cut in September, and trillions of yuan of new relending quotas for technology, small and private firms. Funding costs are low: interbank repo rates averaged 1.4% in September and new corporate loans cost about 3.0% in June. M0 grew 10.6% and deposits 7.5%, so liquidity is ample. A firmer renminbi and FX reserves of USD 3.4 trillion give the PBOC room to cut the policy rate or RRR later without a currency scare. Hong Kong channels, the 2026-2030 reform plan and the e-CNY all widen the PBOC's international reach.
Bear case: Targeted tools have not lifted broad credit: loan growth slowed to 4.8%, M1 to 3.2%, and January-September financing was 2.63 trillion yuan below 2025. The LPR has not moved since at least October 2025 despite repeated statements of 'room' to cut, so the signal and the action diverge. Core CPI is still only 1.0%, while PPI at 5.0% comes from imported energy and metals that squeeze factory margins rather than reflecting demand. Inference (AA): if import costs keep rising while household demand stays weak, the PBOC faces a stagflation-like trade-off with fewer clean options. The MPC's focus on long-term yields hints at a reluctance to let bond yields fall further.
Falsifiers: - Bull case fails if the LPR and 7-day rate stay unchanged through December 2026 and loan growth falls below 4.5% y/y. - Bull case fails if core CPI falls back below 0.5% for several months despite the targeted easing. - Bear case fails if M1 and TSF growth turn up for two or more months in late 2026 without a broad rate cut. - Bear case fails if the PBOC cuts the 7-day reverse repo rate or the RRR, showing that statements of 'room' turn into action. - The 'yuan no longer binds' inference fails if the central parity weakens past the end-2025 level and the PBOC restores the forward-FX risk reserve.
Value accrual gate: Not a crypto asset. For the renminbi, who captures value from PBOC easing depends on the channel: targeted relending and PSL benefit the favoured sectors and policy banks, while savers bear lower deposit yields. AA does not assume that easing raises Chinese asset prices or weakens the yuan; both are UNKNOWN.
What to watch
Monthly LPR fixing: first chance for a cut since May 2025. (2026-11-20 (9:00 Beijing time, published on the 20th each month)); Source: chinamoney.com.cn
NBS October CPI and PPI: does PPI stay near 5% and core CPI near 1%? (2026-11-09); Source: stats.gov.cn
NBS October national economy release (retail sales, investment). (2026-11-16); Source: stats.gov.cn
PBOC October financial statistics (M1, TSF, loans). (mid-November 2026 (no scheduled date verified)); speculative, no scheduled source
SAFE October reserve data: does the 2026 run of monthly gold additions continue? (early November 2026 (no scheduled date verified)); speculative, no scheduled source
PBOC 2026 Q3 Monetary Policy Report and Q4 MPC meeting wording on RRR, rates and long-term yields. (no scheduled date); speculative, no scheduled source
Any RRR or 7-day reverse repo rate cut, which officials said in January there was room for in 2026. (no scheduled date); speculative, no scheduled source
AA inference
Inference (AA): the PBOC is the graph's transmission point from China's weak domestic demand to credit, the renminbi and official gold demand. Its 2026 pattern is targeted easing (relending, PSL, quotas) with the headline LPR frozen, which supports chosen sectors without a broad rate signal. The yuan's strength and the removal of the forward-FX reserve suggest the exchange rate no longer binds as tightly; the constraints now visible are import-driven PPI, long-term yields and slowing credit demand. AA watches three signals: any LPR or RRR change, M1 and TSF growth, and monthly SAFE gold additions. The thesis weakens if the PBOC cuts the 7-day rate or the LPR, which would show a shift back to broad easing, or if core CPI rises clearly above 1% while credit growth stabilises.
Sources
PBOC Monetary Policy Committee 2026 Q3 regular meeting (the 114th), held 2026-09-19 and chaired by Governor Pan Gongsheng: monetary policy 'remains moderately accommodative' (货币政策保持适度宽松) with stronger counter-cyclical and cross-cyclical adjustment; the PBOC will keep liquidity ample and promote 'stable economic growth and a reasonable recovery in prices' (物价合理回升). Copy reposted by the Shanghai municipal financial office with the source line 'People's Bank of China', AA translation. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
The 2026 Q3 MPC statement says the RMB exchange rate 'floats in both directions and remains basically stable at a reasonable and balanced level', that social financing costs are at historically low levels, and that the PBOC will assess the bond market from a macroprudential perspective and watch changes in long-term yields. The statement names no reserve-requirement or policy-rate cut. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
PBOC MPC 2026 Q2 regular meeting (the 113th), held 2026-07-04 and published 2026-07-09: same 'moderately accommodative' stance, 'reasonable recovery in prices' and RMB 'basically stable' wording; it calls for strengthening guidance by the central bank policy rate and watching long-term yields. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
At its 2025 Q3 meeting on 2025-09-23 (the 110th), chaired by Pan Gongsheng, the MPC said China still faced insufficient domestic demand and persistently low price levels, and pledged to keep the RMB exchange rate basically stable. (Source: pbc.gov.cn, accessed 2026-10-20)
PBOC financial statistics for the first three quarters of 2026 (released 2026-10-15): end-September M2 was 359.63 trillion yuan, up 7.2% y/y; M1 116.76 trillion yuan, up 3.2%; M0 15.02 trillion yuan, up 10.6%. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
PBOC: RMB loans rose by 11.52 trillion yuan in January-September 2026; the end-September loan balance was 283.44 trillion yuan, up 4.8% y/y. RMB deposits rose 20.76 trillion yuan to 349.45 trillion yuan (+7.5%). (Source: jrj.sh.gov.cn, accessed 2026-10-20)
PBOC: the stock of total social financing (TSF) was 468.17 trillion yuan at end-September 2026, up 7.1% y/y; the January-September TSF flow was 27.46 trillion yuan, 2.63 trillion yuan less than a year earlier. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
PBOC: in September 2026 the weighted average interbank pledged-repo rate and interbank lending rate were both 1.4%. Cross-border RMB settlement in January-September was 15.23 trillion yuan under the current account and 6.11 trillion yuan for direct investment. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
PBOC 2026 Q2 Monetary Policy Report (repost dated 2026-08-13, source PBOC): DR001 averaged 1.31% in H1 2026; new corporate loan rates were about 3.0% in June, about 20 basis points lower y/y, and new mortgage rates about 3.1%; TSF stock grew 7.4% and M2 8.0% at end-June. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
PBOC 2026 Q2 Monetary Policy Report: the RMB/USD rate was 6.7852 at end-June 2026, about 3% stronger than at end-2025, and the CFETS RMB index was 102.59. Its next-stage wording is to 'continue to implement the moderately accommodative monetary policy well' and keep liquidity ample and financing conditions relatively loose, without naming RRR or rate cuts. (Source: jrj.sh.gov.cn, accessed 2026-10-20)
On 2026-09-29 the PBOC cut the one-year Pledged Supplementary Lending (PSL) rate from 1.75% to 1.5% and widened PSL uses to the 'six networks' (water, power grid, computing power, communications, urban underground pipelines, logistics) (State Council English portal, Xinhua byline). (Source: english.www.gov.cn, accessed 2026-10-20)
Also on 2026-09-29 the PBOC raised the sci-tech relending quota from 1.2 trillion to 1.4 trillion yuan, added 500 billion yuan to agriculture and small-business relending, and raised the private-enterprise relending quota from 1 trillion to 1.3 trillion yuan; housing-loan interest subsidies with the Ministry of Finance and NFRA start 2026-10-01 for a tentative year. (Source: english.www.gov.cn, accessed 2026-10-20)
The National Interbank Funding Center, authorised by the PBOC, published a 1-year LPR of 3.0% and a 5-year-plus LPR of 3.5% on 2026-09-20. (Source: chinamoney.com.cn, accessed 2026-10-20)
The LPR announcement of 2025-10-20 also set the 1-year LPR at 3.0% and the 5-year-plus LPR at 3.5%, so both rates were unchanged across the year to September 2026. (Source: camlmac.pbc.gov.cn, accessed 2026-10-20)
China Money (CFETS) states that 20 quoting banks submit LPR quotes monthly and the LPR is published at 9:00 on the 20th of each month (next working day if a holiday). (Source: chinamoney.com.cn, accessed 2026-10-20)
On 2025-05-07 the PBOC announced a cut in the 7-day reverse repo rate from 1.5% to 1.4% from 2025-05-08 and a 0.5-point RRR cut from 2025-05-15, releasing about 1 trillion yuan and lowering the average RRR from 6.6% to 6.2% (gov.cn, Xinhua). (Source: gov.cn, accessed 2026-10-20)
On 2026-01-15 Deputy Governor Zou Lan announced a 0.25-point cut to all structural monetary-policy tool rates from 2026-01-19, taking the one-year relending rate from 1.5% to 1.25%, a 500 billion yuan addition to agriculture and small-business relending, a dedicated 1 trillion yuan private-enterprise relending line and a 30% minimum down payment for commercial-property loans; she said there was 'still room to cut interest rates and the reserve requirement ratio this year'. (Source: english.www.gov.cn, accessed 2026-10-20)
Governor Pan Gongsheng told Xinhua on 2026-01-22: 'There is still room for further RRR and interest rate cuts this year' (State Council English portal). (Source: english.www.gov.cn, accessed 2026-10-20)
The 2026 Government Work Report (2026-03-05) says China will continue an appropriately accommodative monetary policy and flexibly use instruments including cuts to required reserve ratios and interest rates, with an 'appropriate rebound in prices' as a consideration. (Source: english.www.gov.cn, accessed 2026-10-20)
The PBOC cut the foreign-exchange risk reserve ratio on forward FX sales from 20% to 0 from 2026-03-02, 'to promote foreign exchange market development and support enterprises in managing exchange-rate risk', and said it will keep the RMB basically stable at a reasonable and balanced level (PBOC text reposted by the Wuhan financial office). (Source: jrj.wuhan.gov.cn, accessed 2026-10-20)
At the Lujiazui Forum on 2026-06-17 the PBOC announced six measures: improving short-term interest-rate regulation, an RMB repo facility for foreign monetary authorities, study of a macroprudential liquidity tool for non-bank financial institutions in specific circumstances, an offshore RMB FX trading pilot in the Shanghai FTZ, an offshore-finance action plan with Shanghai, and an interbank market data repository. (Source: english.www.gov.cn, accessed 2026-10-20)
Pan Gongsheng's Lujiazui speech (BIS central bankers' speeches): the 7-day reverse repo rate is the key policy rate; the ad hoc overnight repo corridor narrows from 70 to 50 basis points (7-day rate plus or minus 25 bp); in 2025 loans were 45% of new aggregate financing and bonds plus equity 47%; 'Slower credit growth yet more efficient credit allocation may become a new normal in China's macro economy.' (Source: bis.org, accessed 2026-10-20)
Pan Gongsheng in Hong Kong on 2026-07-07 (BIS speeches): the southbound Bond Connect annual net quota rises from RMB 500 billion to RMB 800 billion, the RMB Business Facility from RMB 200 billion to RMB 500 billion, the RMB-HKD standing swap is RMB 800 billion, and Hong Kong handles over 70% of global cross-border RMB payments. (Source: bis.org, accessed 2026-10-20)
On 2026-08-10 the PBOC issued a 2026-2030 reform and development plan covering wider international use of the RMB, CIPS, offshore RMB markets, market-based interest-rate transmission, a market-determined exchange rate kept broadly stable, and wider macroprudential management (State Council English portal, Xinhua). (Source: english.www.gov.cn, accessed 2026-10-20)
SAFE official reserve assets: foreign-currency reserves were USD 3,400.25 billion at end-September 2026 (USD 3,438.33 billion at end-August); gold rose to 77.47 million fine troy ounces from 76.73 million while its value fell to USD 323.52 billion from USD 350.08 billion; total reserve assets USD 3,789.43 billion. (Source: safe.gov.cn, accessed 2026-10-20)
SAFE monthly table: reported gold holdings rose every month from January (74.19 million ounces) to September 2026 (77.47 million ounces); the December 2025 figure was not read; foreign-currency reserves ranged between USD 3,342.12 billion (March) and USD 3,442.24 billion (May). (Source: safe.gov.cn, accessed 2026-10-20)
The CFETS central parity, as published by SAFE, was 6.7200 yuan per US dollar on 2026-10-20, against 6.7351 on 2026-09-30. (Source: safe.gov.cn, accessed 2026-10-20)
NBS: September 2026 CPI rose 0.9% y/y and 0.2% m/m; CPI excluding food and energy rose 1.0%; food prices fell 1.7%; the January-September average was 0.9%. (Source: stats.gov.cn, accessed 2026-10-20)
NBS: September 2026 PPI rose 5.0% y/y and 1.2% m/m; producer purchase prices rose 6.9%; the January-September PPI average was +2.3%. (Source: stats.gov.cn, accessed 2026-10-20)
From 2026-01-01 e-CNY balances in commercial-bank wallets are treated as deposit liabilities that pay interest under deposit-rate rules, count toward the reserve-requirement base and are covered by deposit insurance; non-bank payment institutions must hold 100% reserves. By end-November 2025 there had been 3.48 billion e-CNY transactions worth 16.7 trillion yuan (State Council English portal, Xinhua). (Source: english.www.gov.cn, accessed 2026-10-20)
The PBOC opened an e-CNY international operation center in Shanghai on 2025-09-25 with a cross-border digital payment platform, a blockchain service platform and a digital asset platform. (Source: english.www.gov.cn, accessed 2026-10-20)
BIS: Project mBridge reached minimum viable product stage in mid-2024 and the BIS handed it to the partners in October 2024; founding participants are the Bank of Thailand, the Central Bank of the UAE, the Digital Currency Institute of the PBOC and the HKMA, and the Saudi Central Bank joined in 2024. (Source: bis.org, accessed 2026-10-20)
NBS release calendar: October 2026 CPI and PPI are due 2026-11-09 and the October national economy release 2026-11-16 (dates preliminary). (Source: stats.gov.cn, accessed 2026-10-20)