The People's Bank of China (PBOC) announced a shift to a 'moderately loose' monetary policy for 2025, as highlighted by Deputy Governor Xuan Changneng during a press conference on January 14.

This new approach marks a significant departure from the prudent policies that have been in place for the past 14 years, a decision made during the Central Economic Work Conference in December 2024.

The PBOC plans to adjust its policies based on both domestic and international economic conditions to effectively support economic and social development goals.

Yang anticipates that intensified policies aimed at stabilizing economic growth will have a positive impact on capital markets and aid in national economic recovery.

During the press conference, Chinese officials also announced financial support initiatives aimed at fostering high-quality economic development.

To reduce financing costs for businesses and individuals, the PBOC will maintain order in the deposit market and support banks' capital replenishment through government bonds.

Despite complex circumstances, the yuan has remained stable, contributing positively to economic and trade stability.

Regulators are focused on strengthening the resilience of the foreign exchange market to stabilize expectations and mitigate excessive fluctuations in the yuan's exchange rate.

In 2024, yuan-denominated loans rose significantly, with the broad money supply (M2) reaching 313.53 trillion yuan, reflecting improved economic expectations.

Officials plan to expand interest rate cuts and optimize financial tools to benefit the stock market while cautioning against excessive speculation on treasury bond yields.

As of December 2024, total social financing in China increased by 8% year-on-year, indicating a strong credit environment.

The PBOC aims to coordinate with fiscal policies to guide financial institutions in increasing credit resources and optimizing credit structures.