The People's Bank of China indicated on July 15 that loan growth is shifting from scale expansion to quality improvement, and such a shift may become a new feature of the macroeconomy. In the first half of 2026, renminbi loan growth moderated while net corporate bond financing rose by 916.7 billion yuan year-on-year to 2.07 trillion yuan.
The central bank stressed that policy stance should not be judged by the size of a single open market operation; short-end market rates are a more appropriate gauge. It will use a mix of tools including reserve requirement ratio, reverse repos, medium-term lending facility, and government bond trading based on liquidity needs, with RRR cuts mainly providing long-term funds and reverse repos and MLF focusing on short- to medium-term liquidity.
On supporting key sectors, the PBoC will continue to deploy structural monetary policy measures, increasing quotas and improving terms when needed, with emphasis on expanding domestic demand, technological innovation, and micro and small firms. By end-April, outstanding loans for tech innovation and equipment upgrades reached 1.5 trillion yuan, among which 21,000 tech-oriented SMEs obtained first-time loans, facilitating future financing.
Regarding the exchange rate, the yuan had strengthened 3% against the dollar by end-June from end-2025, trading around 6.8 per dollar, approximately the mid-range of recent years. Two-way fluctuations are expected to continue. The PBoC will closely monitor global economic and financial developments and maintain an accommodative monetary environment to support sustained economic improvement.
Meanwhile, panda bond issuance boomed, exceeding 160 billion yuan in H1, up 69% year-on-year, with more international issuers and broad domestic investor participation. The PBoC will further promote high-quality development of the panda bond market and facilitate issuance and trading by foreign institutions.