File photo shows an exterior view of the People's Bank of China in Beijing, capital of China. (Photo: Xinhua)

China's central bank, the People's Bank of China (PBC), held its 2025 work conference from Friday to Saturday, highlighting commitments to implement the moderately loose monetary policy and foster a conducive monetary and financial environment for stable economic growth. 

As one of the work priorities in 2025, the PBC plans to implement a range of monetary policy tools and cut the reserve requirement ratio and the interest rate at an appropriate time to ensure sufficient liquidity and stable growth of financial aggregates.

The State Administration of Foreign Exchange 2025 work conference from Friday to Saturday outlined the work priorities for the year, including reinforcing efforts to ensure stability in the foreign exchange market, improving counter-cyclical regulation and expectation management.

The two conferences followed a recent meeting of the PBC's monetary policy committee, during which the PBC advised to strengthen monetary policy regulation, including reductions in the RRR and cutting interest rates at an appropriate time, according to a release by China's central bank on Friday.

In the face of intensifying adverse effects resulting from changes in the current external environment, the committee recommended efforts to strengthen monetary policy adjustments with a more forward-looking, targeted, and effective approach, according to the release of the fourth-quarter meeting of the PBC's monetary policy committee, held on December 27.

During this regular monetary policy meeting, the committee reiterated the importance of maintaining stability in foreign exchange market expectations and commitment to mitigating risks associated with excessive exchange rate fluctuations.

The meeting proposed bolstering the resilience of the foreign exchange market, ensuring stable market expectations, and proactively preventing excessive exchange rate fluctuations, and maintaining the basic stability of the yuan exchange rate at a reasonable and balanced level, according to the PBC release.

There is ample room for the PBC to cut the RRR in 2025, and there is also some space for interest rate cuts, which allows for appropriate adjustments based on the international monetary policy environment, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Saturday.

The meeting aligned with the statement that a moderately loose monetary policy should be implemented, including reductions in the RRR and interest rates at appropriate times to ensure ample liquidity, as noted at the Central Economic Work Conference held from December 11 to 12, 2024, in Beijing.

The PBC monetary policy committee meeting also emphasized the significance to enhance the coordination between monetary and fiscal policies and maintain stable economic growth and overall price stability, according to the PBC release.

The effective coordination of financial policy, fiscal policy, and structural guidance is expected to maintain overall price stability and maintain consumers' confidence, Dong said.

Global Times