Since the beginning of 2022, the PBC has followed the guidance of Xi Jinping Thought
on Socialism with Chinese Characteristics for a New Era and has implemented the
guidelines of the 19th National Congress of the Communist Party of China (CPC), all
plenary sessions of the 19th CPC Central Committee and the Central Economic Work
Conference, and the requirements set forth in the Report on the Work of the Government.
It has kept its sound monetary policy flexible and appropriate, and it has given full play
to both aggregate and structural monetary policy instruments. Money, credit, and
aggregate financing to the real economy (AFRE) have grown reasonably, the credit
structure has improved continuously, and overall financing costs have steadily declined,
with financial support for the real economy continuously enhanced.
I. Liquidity in the banking system was adequate at a reasonable level
Since the beginning of 2022, the PBC has given top priority to the stability of monetary
policy, made progress while maintaining stability, and taken quick measures at an early
stage based on developments of the macro situations. It has adopted a mix of tools, such
as the required reserve ratio (RRR) cut,
turning over profits, the Medium-term Lending
Facility (MLF), central bank lending and discounts, and open market operations
(OMOs) to provide liquidity. It has also managed the intensity and pace of OMOs in a
flexible manner and has kept liquidity in the banking system adequate at a reasonable
level. In January 2022, the PBC guided both OMO rates and MLF rates to go down by
ten basis points. Short-term interest rates in the money market floated around the OMO
rates with a further decline in its volatility, which provided proper liquidity for
stabilizing the macro economy and keeping the economic indicators within a reasonable
range. At end-March 2022, the excess reserve ratio of financial institutions registered
1.7 percent, up 0.1 percentage points year on year.