The Q4 report
The People's Bank of China published its Q4 2025 Monetary Policy Report on Friday, keeping the policy stance at "moderately loose" while flagging trade tensions and weak external demand as the principal downside risks to the growth outlook.
Key lines
- "Aggregate financing will grow at a rate consistent with nominal GDP."
- "The yuan exchange rate will remain basically stable at a reasonable and balanced level."
- "Property destocking remains a multi-year process."
The report's section on monetary aggregates repeats the Q3 language on "appropriate liquidity provision" and adds a new paragraph on the role of the structural tools (PSL, re-lending facilities) in supporting the equipment-upgrade and consumer-goods-replacement programs.
What changed from Q3
- New emphasis on the "two new" sectors (new energy vehicles, electronics)
- A removed sentence on housing destocking "progressing ahead of schedule"
- A forward-looking paragraph on H1 2026 liquidity: "ample but not flooding"
Market reaction
CGB 10-year yields were little changed; the yuan onshore rate firmed 50 pips to 7.28. The 1-year MLF rate stayed at 2.00%, in line with the September fix.
The report walks a careful line: easing language retained, with new hedges. — ANZ, China rates research
