China’s central bank pledges to cut RRR, interest rate in 2026

[BEIJING] China’s central bank said on Tuesday (Jan 6) it will cut the reserve requirement ratio (RRR) and interest rates in 2026 to keep liquidity ample, and continue to implement appropriately loose monetary policy.

The central bank said it will intensify counter-cyclical and cross-cyclical adjustments, boost domestic demand, improve supply, and defuse financial risks to support steady growth, giving the new five-year plan a solid start.

The central bank will “make flexible and efficient use of multiple monetary policy tools such as reserve requirement ratio cuts and interest-rate cuts, maintain ample liquidity, keep overall financing conditions relatively accommodative, and guide reasonable growth in total credit as well as balanced loan issuance,” it said in a statement on its website, following a 2026 work meeting.

The central bank’s comment echoed a pledge made by top leaders at a key meeting in December. In December, the central bank kept benchmark loan prime rates (LPRs) unchanged for the seventh consecutive month, in line with market expectations.

It would also keep yuan exchange rate basically stable “at a reasonable and balanced level,” the central bank said. REUTERS