China's central bank vows flexible, efficient cuts in reserve ratio, rates in 2026

China will flexibly and efficiently use monetary ​policy tools such as cuts ‌to the reserve requirement ratio (RRR) and interest rates this year, and ​curb "involution-style" competition in some ​sectors, the central bank governor ⁠said on Friday.

Pan Gongsheng ​of the People's Bank of China (PBOC) ​said the US-Israeli war on Iran has led to a sharp ​spike in risk aversion sentiment ​in global financial markets, fuelling pronounced ‌volatility ⁠in the dollar index and other currencies.

The PBOC will maintain the yuan currency's flexibility and ​encourage ​financial institutions ⁠to offer hedging services to business, Pan ​said, adding that more ​than ⁠60 percent of China's trade is less exposed to currency exchange ⁠rate ​swings.

Reuters