The recently released China Monetary Policy Implementation Report for the Fourth Quarter of 2025 by the People's Bank of China shows that the effects of moderately loose monetary policy in 2025 will gradually appear, and the total financial volume will maintain rapid growth. Regarding the monetary policy in the next stage, the report clearly stated that it will continue to implement a moderately loose monetary policy to support the "15th Five-Year Plan" to achieve a good start.
Support stable growth of the real economy
The report believes that since last year, the People's Bank of China has implemented a moderately loose monetary policy. On the basis of implementing the existing monetary policy, it has also launched a package of monetary and financial policies to strengthen countercyclical adjustments and effectively support the stable growth of the real economy and the smooth operation of the financial market.
——Maintain reasonable growth of money and credit. Comprehensive use of various monetary policy tools such as the deposit reserve ratio and open market operations will be used to maintain sufficient liquidity. Guide financial institutions to strengthen project reserves and credit extension to fully meet the effective credit needs of the real economy.
——Promote the reduction of comprehensive social financing costs at low levels. Lowering policy interest rates, interest rates on structural monetary policy tools and interest rates on personal housing provident fund loans will strongly support the reduction of comprehensive social financing costs. Strengthen the implementation and supervision of monetary policy and improve the self-discipline management of interest rates.
——Increase support for major strategies, key areas and weak links. We will enrich and improve the system of structural monetary policy tools, adjust and optimize the credit structure, and support the "five major articles" of finance. Increase the amount of re-loans for scientific and technological innovation and technological transformation, and re-loans to support agriculture and small businesses by 300 billion yuan each, and create 500 billion yuan of service consumption and pension re-loans, and 200 billion yuan of scientific and technological innovation bond risk-sharing instruments.
——Keep the exchange rate basically stable. We must insist that the market plays a decisive role in the formation of exchange rates, give full play to the regulatory function of exchange rates on the macroeconomy and the balance of payments, and implement comprehensive policies to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.
——Financial risks in key areas continue to converge. Integrate and establish the Macro-prudential and Financial Stability Committee of the People's Bank of China to further improve the macro-prudential management and financial stability guarantee system. Optimize and support the two monetary policy tools of the capital market, and support Huijin's role as a "quasi stabilization fund". Steadily promote the disposal of financial risks in key institutions and key regions.
Financing structure continues to be optimized
In recent years, the People's Bank of China has continuously improved the system of structural monetary policy tools to support major strategies, key areas and weak links, further enhance the adaptability of financial services to economic structural adjustment and high-quality development, and promote the continuous optimization of the financing structure.
From the perspective of investment distribution, by the end of 2025, technology loans, green loans, inclusive loans, elderly care industry loans, and digital economy industry loans have increased by 11.5%, 20.2%, 10.9%, 50.5%, and 14.1% respectively year-on-year, which are higher than the growth rate of all loans.
From the perspective of term structure, at the end of 2025, short-term RMB loans accounted for approximately 24.9%, and medium- and long-term loans accounted for approximately 66.5%. Among them, medium- and long-term loans to enterprises (institutions) increased by 8.8 trillion yuan from the beginning of the year, accounting for approximately 57.0% of all corporate loans.
From the perspective of the main structure, at the end of 2025, RMB household loans from financial institutions accounted for approximately 30.6%, and loans to enterprises (institutions) accounted for approximately 68.1%.
In terms of financing methods, at the end of 2025, direct financing, including corporate bonds, government bonds and domestic stock financing of non-financial enterprises, accounted for approximately 32.0% of the stock of social financing, an increase of 0.4 and 1.4 percentage points respectively from the end of September and the end of 2024.
The development of green finance is not only a need for the comprehensive green and low-carbon transformation of society, but also an inevitable requirement for the high-quality development of finance itself. The report shows that during the "14th Five-Year Plan" period, the average annual growth rate of green loans was 30.2%, 21.1 percentage points higher than that of all loans, and the proportion of green loan balances in all loans increased significantly from 6.7% to 16.2%; a total of 5.2 trillion yuan of green bonds were issued, with a balance of 2.4 trillion yuan, an increase of 1.8 times from the end of 2020, and the scale ranks among the top in the world.
Continue to implement a moderately loose monetary policy
The report states that in the next stage, the People's Bank of China will balance the short-term and long-term, support the real economy and maintain the health of the banking system itself, internal balance and external balance, strengthen the consistency of macro policy orientation, make counter-cyclical and inter-cyclical adjustments, improve the efficiency of macroeconomic governance, and support the "15th Five-Year Plan" to achieve a good start.
First, continue to implement a moderately loose monetary policy. We should regard the promotion of stable economic growth and reasonable price recovery as important considerations in monetary policy, and grasp the intensity, rhythm and timing of policy implementation based on the domestic and international economic and financial situations and the operation of financial markets. Flexibly and efficiently use various policy tools such as reserve requirement ratio and interest rate cuts to maintain sufficient liquidity and relatively loose social financing conditions, guide the reasonable growth of financial aggregates, and balance the release of credit, so that the growth of social financing scale and money supply matches the expected goals of economic growth and overall price levels.
Secondly, further improve the interest rate control framework, strengthen the central bank's policy interest rate guidance, improve the market-oriented interest rate formation and transmission mechanism, give full play to the role of the market interest rate pricing self-discipline mechanism, strengthen the implementation and supervision of interest rate policies, reduce bank liability costs, and promote the low operation of comprehensive social financing costs.
At the same time, the coverage of explicit disclosure of comprehensive financing costs for corporate loans will be expanded in an orderly manner. Effectively implement various structural monetary policy tools, solidly implement the "five major articles" of finance, and strengthen financial support for key areas such as expanding domestic demand, technological innovation, and small, medium and micro enterprises.
In addition, 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, maintain exchange rate flexibility, give full play to the function of the exchange rate as an automatic stabilizer in regulating macroeconomics and the balance of payments, strengthen guidance on expectations, 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 macro-prudential and financial stability functions of the central bank, improve the macro-prudential and financial stability management toolbox, maintain financial market stability, and resolutely maintain the bottom line of preventing systemic financial risks.
