Chinese Central Bank’s 2020 Q4 Meeting Highlights Support for Post-COVID 19 Recovery, Stable Yet Flexible Monetary Policy


The routine meeting of the People’s Bank of China (PBOC) for the final quarter of 2020 has highlighted the maintenance of stable yet flexible monetary policy as well as ongoing support measures to deal with the economic impacts of the COVID-19 pandemic.

“At present the overseas pandemic and global economic conditions remain complex and challenging,” said the meeting.

“Domestic economic productivity has strengthened, but also faces shock from unstable and uncertain factors such as the pandemic.

“[We] must strengthen research and analysis of economic conditions, strengthen international macro-economic policy coordination, focus energy on effectively handling our own affairs, effectively undertake cross-cyclical policy design, and support high-quality growth of the economy.”

The PBOC meeting also called for “stable monetary policy that must be flexibly targeted and rationally adjusted,” as well as “maintaining the continuity, stability and sustainability of monetary policy, effectively grasping the timeliness of policy, and maintaining the necessary support vigour for economic recovery.”

PBOC will make “integrated usage of and innovate multiple monetary policy tools, maintain rationally ample liquidity, and maintain fundamental consistency between the monetary supply, total social financing and nominal economic growth.”

Other key areas of emphasis included:

  • Maintaining fundamental stability of the macro-leverage ratio.
  • Maintaining the fundamental stability of the renminbi exchange rate at a rationally balanced level.
  • Stability and no “urgent turns.”
  • Deepening of interest rate market reforms.
  • Improving market-based interest rate formation and transmission mechanisms.
  • Guiding enterprises and financial institutions to uphold the concept of “risk neutrality.”
  • Stabilizing market expectations.
  • Effective handling of the relationship between economic recovery and risk prevention.
  • Firmly guarding the line against the onset of systemic financial risk.