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PBoC signals it will keep appropriately loose policy and support demand

The PBoC said it will step up counter cyclical measures, keep the 7-day reverse repo rate as its pricing anchor, and focus on keeping the yuan basically stable.

Reported · Written up by our desk · Central Banks

FXStreet reports that the People’s Bank of China, through a deputy governor’s comments during the European trading session, said it remains committed to appropriately loose monetary policy to support overall demand.

The central bank indicated it will step up counter cyclical adjustments, with the 7-day reverse repo rate continuing as its main policy rate and pricing anchor for markets. It also referenced studying plans to gradually increase the frequency of overnight reverse repo operations to improve liquidity management.

The PBoC said it plans to steadily push forward reforms to improve its policy framework and will keep the yuan basically stable, while acknowledging the currency faces both upward and downward factors amid global uncertainties, supporting two-way moves.

The comments were linked to slight support for the Australian dollar, with AUD/USD trading about 0.17% higher near 0.6986 at the time of the report.

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