PBoC drains net 266.8 billion yuan in open market operations

PBoC drains net 266.8 billion yuan in open market operations

Beijing — China's central bank, the People's Bank of China (PBOC), has announced a series of policy adjustments aimed at responding to both domestic and global economic conditions. In a statement following its quarterly monetary policy committee meeting, the PBOC pledged to increase the intensity and forward-looking nature of its monetary policy adjustments [1].

The world's second-largest economy has faced significant pressure this year, with U.S. President Donald Trump's tariffs on Chinese products and persistent deflationary pressures at home. The PBOC acknowledged that the external environment has grown increasingly complex, characterized by weakening global economic growth, rising trade barriers, and diverging economic performance among major economies [1].

Domestically, the PBOC identified several challenges, including insufficient domestic demand, persistently low price levels, and multiple hidden risks. To address these issues, the central bank plans to guide financial institutions to step up credit supply and lower overall social financing costs. Additionally, the PBOC will enhance the resilience of the foreign exchange market and work to keep the yuan exchange rate "basically stable at a reasonable and balanced level" [1].

In a separate development, the PBOC has also announced that it will drain net 266.8 billion yuan in open market operations (OMO) [2]. This move is part of the central bank's efforts to manage liquidity and control inflation. The OMO operation involves the sale of government bonds to reduce the money supply in the economy.

The PBOC's policy adjustments come as China seeks to navigate a challenging economic landscape. By increasing the pace and intensity of its policy implementation, the central bank aims to bolster economic growth and address the various challenges it faces.

References:
[1] https://www.investing.com/news/economy-news/chinas-central-bank-pledges-to-speed-up-policy-response-to-economic-conditions-4114444
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_P8N3SC0CF:0-china-central-bank-pledges-to-adjust-policy-pace-based-on-internal-external-economic-conditions/