During the forum, Pan Gongsheng, the governor of the People’s Bank of China (PBOC), reiterated a commitment to supportive monetary policies while clearly distancing itself from Western-style quantitative easing. Instead, Pan emphasized a gradual approach to incorporating bond purchases as a liquidity management tool. This pivot aligns China’s monetary policy more closely with global central banking practices, moving from quantity-based to price-based regulation.
Pan also suggested potential interest rate reforms, aiming to prioritize a single short-term rate to guide markets, thus reducing reliance on the one-year policy rate, signaling a step toward modernizing China’s monetary policy framework.
