PANews reported on February 10 that the People's Bank of China released its 2025 Fourth Quarter Monetary Policy Implementation Report, outlining several important policy directions:
2025 marks the final year of the 14th Five-Year Plan. Under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the national economy maintained a steady and progressive development trend, and the main economic and social development goals were successfully achieved. The annual GDP grew by 5% year-on-year. The People's Bank of China, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely implemented the decisions and plans of the CPC Central Committee and the State Council, implemented a moderately loose monetary policy, and, on the basis of effectively implementing existing monetary policies, introduced a package of monetary and financial policies to strengthen counter-cyclical adjustments and effectively support the stable growth of the real economy and the smooth operation of the financial market.
First, maintain reasonable growth in money and credit. Utilize a variety of monetary policy tools, including the reserve requirement ratio and open market operations, to maintain ample liquidity. Guide financial institutions to strengthen project reserves and credit issuance to fully meet the effective credit demand of the real economy. Second, promote a low level of overall social financing costs. Lower policy interest rates, structural monetary policy tool rates, and personal housing provident fund loan rates to effectively support the reduction of overall social financing costs. Strengthen the implementation and supervision of monetary policy and improve interest rate self-discipline management. Third, increase support for major strategies, key areas, and weak links. Enrich and improve the structural monetary policy tool system, adjust and optimize the credit structure, and support the "five major financial initiatives." Increase the quota for relending on technological innovation and technological upgrading, and relending for agriculture and small businesses by 300 billion yuan each; create a 500 billion yuan relending facility for service consumption and elderly care, and a 200 billion yuan risk-sharing tool for technological innovation bonds. Fourth, maintain basic exchange rate stability. Uphold the market's decisive role in exchange rate formation, give full play to the exchange rate's regulatory function on the macroeconomy and balance of payments, and implement comprehensive measures to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Fifth, continue to reduce financial risks in key areas. The People's Bank of China will integrate and establish the Macroprudential and Financial Stability Committee to further improve the macroprudential management and financial stability guarantee system. The two monetary policy tools supporting the capital market will be optimized, and the role of Central Huijin Investment Ltd. as a "quasi-stabilization fund" will be supported. The resolution of financial risks in key institutions and key regions will be steadily advanced.
The effects of the moderately loose monetary policy in 2025 will gradually become apparent. The overall financial volume will maintain rapid growth, with year-end total social financing and broad money supply (M2) increasing by 8.3% and 8.5% year-on-year, respectively, significantly higher than the nominal GDP growth rate. After adjusting for the impact of local government debt reduction, RMB loans will grow by approximately 7%, indicating continued strong credit support. The overall social financing cost will further decline, with the interest rates for newly issued corporate loans and personal housing loans both around 3.1% in December. The credit structure will continue to optimize, with year-end loans to technology, green finance, inclusive finance, elderly care, and digital economy industries increasing by 11.5%, 20.2%, 10.9%, 50.5%, and 14.1% year-on-year, respectively, all maintaining double-digit growth and consistently exceeding the overall loan growth rate. Despite the complex situation, the RMB exchange rate remained basically stable. At the end of 2025, the closing price of the RMB against the US dollar was 6.9890 yuan, appreciating by 4.4% compared with the end of 2024. The RMB exchange rate index of China Foreign Exchange Trading System (CFETS) was 97.99, depreciating by 3.4% compared with the end of 2024.
The impact of current external environmental changes is deepening. Global economic growth momentum is insufficient, trade barriers are increasing, and the economic performance of major economies is diverging. Inflation trends and monetary policy adjustments remain uncertain. my country's economy is generally stable and progressing steadily, with new achievements in high-quality development, but challenges such as strong supply and weak demand still exist. At the same time, my country's economic foundation is solid, with numerous advantages, strong resilience, and great potential. The supporting conditions and basic trend for long-term positive growth remain unchanged. We must strengthen our confidence, make good use of our advantages, and meet challenges to continuously consolidate and expand the momentum of steady economic growth. In the next stage, the People's Bank of China will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China and its subsequent plenary sessions, as well as the Central Economic Work Conference, firmly grasp the primary task of high-quality development, solidly promote Chinese-style modernization, adhere to the general principle of seeking progress while maintaining stability, fully, accurately, and comprehensively implement the new development philosophy, accelerate the construction of a new development pattern, place greater emphasis on strengthening the domestic economic cycle, coordinate the relationship between total supply and total demand, enhance the forward-looking, targeted, and coordinated nature of macroeconomic policies, focus on expanding domestic demand and optimizing supply, optimize incremental growth and revitalize existing assets, and continuously consolidate and expand the momentum of steady economic growth. We will unswervingly follow the path of financial development with Chinese characteristics, further deepen financial reform and high-level opening up, accelerate the building of a strong financial nation, improve the central bank system, construct a scientific and sound monetary policy system and a comprehensive macro-prudential management system, and smooth the transmission mechanism of monetary policy. We will balance the relationship between short-term and long-term goals, supporting the real economy and maintaining the health of the banking system itself, and internal and external equilibrium, strengthen the consistency of macroeconomic policy orientation, effectively carry out counter-cyclical and cross-cyclical adjustments, improve the efficiency of macroeconomic governance, and support a good start to the 15th Five-Year Plan.
We will continue to implement a moderately loose monetary policy. Promoting stable economic growth and a reasonable recovery in prices will be key considerations in monetary policy. We will carefully manage the intensity, pace, and timing of policy implementation based on the domestic and international economic and financial situation and the operation of financial markets. We will flexibly and efficiently utilize various policy tools, such as reserve requirement ratio cuts and interest rate cuts, to maintain ample liquidity and relatively loose social financing conditions. We will guide reasonable growth in the total financial volume and balanced credit allocation, ensuring that the growth of social financing and money supply matches the expected targets for economic growth and the overall price level. We will further improve the interest rate control framework, strengthen the guidance of the central bank's policy interest rates, improve the market-based interest rate formation and transmission mechanism, leverage the role of the market interest rate pricing self-regulatory mechanism, strengthen the implementation and supervision of interest rate policies, reduce bank liability costs, and promote low overall social financing costs. We will orderly expand the coverage of the disclosure of comprehensive financing costs for corporate loans. We will leverage the dual functions of monetary policy tools—both in terms of quantity and structure—effectively implement various structural monetary policy tools, solidly carry out the "five major tasks" of finance, and strengthen financial support for key areas such as expanding domestic demand, technological innovation, and small and medium-sized enterprises. We will adhere to a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies. We will maintain exchange rate flexibility, leverage the exchange rate's function as an automatic stabilizer for the macroeconomy and balance of payments, strengthen expectation guidance, prevent the risk of exchange rate overshooting, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. We will expand and enrich the central bank's macro-prudential and financial stability functions, improve the toolbox for macro-prudential and financial stability management, safeguard financial market stability, and resolutely prevent systemic financial risks.
