B[Central Bank: China insists on letting the market play a decisive role in the formation of exchange rates] On October 8, the People's Bank of China's policy stance on the RMB exchange rate stated that China implements a managed floating exchange rate system based on market supply and demand and adjusted with reference to a basket of currencies. China's exchange rate system has the following characteristics: First, it insists on letting the market play a decisive role in the formation of exchange rates. After years of development, China has gradually formed a multi-level foreign exchange market system with complete functions. The depth and breadth of the foreign exchange market have continued to expand. Business entities independently participate in foreign exchange transactions based on commercial principles. Market supply and demand play a decisive role in the formation of the RMB exchange rate. The People's Bank of China does not set a target level for the exchange rate, does not interfere with the long-term trend of the exchange rate, and maintains exchange rate flexibility and two-way floating. After 2017, the People's Bank of China withdrew from normalized foreign exchange intervention.
The second is to focus on preventing large short-term fluctuations in exchange rates, especially short-term sharp depreciation, from affecting financial stability. In certain situations, such as the outbreak of the epidemic and major external shocks such as the tariff war in April 2025, the People's Bank of China uses macro-prudential management tools for adjustment and forecast guidance, and even directly conducts foreign exchange intervention in extreme scenarios to correct the market's "herding effect" and irrational expectations, especially the self-reinforcement of irrational depreciation expectations, and prevent short-term destructive overshooting of the exchange rate.
The third is to continuously enhance the transparency of exchange rate policy. Since 2016, China has released balance of payments and related foreign exchange data with higher international standards in accordance with the Special Data Disclosure Standards (SDDS) of the International Monetary Fund (IMF), and continues to increase the dimension and frequency of data release. China has actively responded to the initiative of international organizations and will further report foreign exchange-related data to the IMF starting from 2027. B[Central Bank: China insists on promoting the transformation of economic growth mode, expanding domestic demand and high-level opening up to the outside world] On October 8, the People's Bank of China's policy stance on the RMB exchange rate stated that China will firmly implement the strategic direction and key measures determined in the "15th Five-Year Plan", insist on promoting the transformation of economic growth mode, expand domestic demand and high-level opening up, and contribute to a new round of dynamic balance of the global economy. Adhere to the dominance of domestic demand, vigorously boost consumption, expand effective investment, adhere to the close integration of investment in things and investment in people, strengthen the domestic cycle, and smooth the domestic and international dual cycles. Improve the business environment and provide a level playing field for all types of market entities. Focus on technological innovation and promote productivity improvement. Promote inclusive economic growth, focus on increasing the disposable income of residents and families, and improve the income distribution system and social security system. Steadyly expand high-level opening up to the outside world, accelerate the development of a core market for global demand on the basis of a global manufacturing power, and use China's large market to provide new opportunities for countries around the world. Strengthen international economic and financial cooperation, actively participate in and promote the reform and improvement of global financial governance, and maintain global economic and financial stability. B[The central bank uses multiple tools to protect liquidity, and funding is expected to be stable across quarters] On September 29, the end-of-quarter assessment superimposed the demand for capital reserves before the National Day holiday, and the inter-bank market faced a cross-quarter test. The central bank extended the medium-term lending facility (MLF) ahead of schedule, increased the upper limit of overnight reverse repurchase operations, and injected funds with reverse repurchases of different maturities to provide support for a stable cross-season. Many institutions believe that the central bank's increased investment, coupled with the net return of government debt funds and an increase in fiscal expenditures at the end of the quarter, will generally control the funding pressure this week. After the cross-quarter, post-holiday cash flow and other factors are expected to promote loosening of funds, but in late October, we still need to pay attention to the disturbance caused by the superposition of tax payments and the expiration of open market operations. (Shanghai Securities News) B[Eight departments including the central bank: guide financial institutions to comprehensively use diversified tools such as credit, bonds, and equity to support the development of "artificial intelligence + software"] On September 28, eight departments including the People's Bank of China jointly issued the "Guiding Opinions on Financial Support for Expansion and Quality Improvement of the Service Industry", which proposed to empower the innovative development of software and information technology services. Guide financial institutions to comprehensively use diversified tools such as credit, bonds, and equity to support the development of "artificial intelligence + software", promote innovative breakthroughs in intelligent programming tools and industrial software, build basic software ecosystems and open source communities, and apply smart audio-visual system ecological scenarios, and develop new business formats such as intelligence as a service and models as a service. Improve the financial guarantee for digital transformation services in the manufacturing industry and support the development of digital transformation service providers in the manufacturing industry. Actively meet the financing needs in areas such as artificial intelligence technology research and development, industry high-quality data set construction, application scenario expansion, and industrial ecological cultivation. Encourage financial institutions to provide medium and long-term financing for the construction of digital infrastructure such as information transmission, data and information technology, and strengthen financial support for national computing power layout, edge computing power construction, intelligent computing cloud service system, etc. B[Central Bank: Increase credit support for the service industry and provide support for first loans, credit loans, and medium and long-term loans] On September 28, eight departments including the People's Bank of China jointly issued the "Guiding Opinions on Financial Support for the Expansion and Quality Improvement of the Service Industry," which proposed increasing credit support for the service industry. Financial institutions are encouraged to focus on the capital needs of business entities in the service industry and provide support for first loans, credit loans, and medium and long-term loans. Innovate the supply of credit products and services by combining the operating characteristics of the producer service industry and the operating scenarios of the daily service industry. Improve the pledge financing mechanism such as intellectual property rights, reasonably determine the pledge ratio, and enhance the ability to lend on pledge of intangible assets. Rely on the financing credit service platform to strengthen the collection and sharing of credit information of service industry enterprises and improve the credit profile of small, medium and micro enterprises. Increase the convenience of credit in the service industry, optimize the loan approval process, promote the active credit granting and loan repayment model at any time, and meet the flexible financing needs of business entities. In view of the small size and light asset characteristics of the service industry, a risk assessment and differentiated pricing system covering the entire life cycle should be constructed. Standardize the development of credit products such as student loans and entrepreneurial guaranteed loans, and improve the level of financial services for people investing in them. A[Central Bank: We must continue to implement a moderately loose monetary policy and increase countercyclical adjustments] On September 24, the Monetary Policy Committee of the People's Bank of China for the third quarter of 2026 (the 114th in total) regular meeting was held on September 19. The meeting analyzed the domestic and international economic and financial situations and believed that the current external environment is more complex and changeable, with weak world economic growth momentum, frequent geopolitical conflicts and economic and trade frictions, divergent economic performance of major economies, and uncertainties in inflation trends and monetary policy adjustments. China's economy is generally operating stably, with new momentum, improved structure, and new results in high-quality development. However, it still faces problems and challenges such as strong supply and weak demand, structural differentiation, and external shocks. It is necessary to continue to implement a moderately loose monetary policy, increase countercyclical adjustments, better utilize the dual functions of monetary policy tools in terms of total volume and structure, strengthen the coordination of monetary and fiscal policies, and promote stable economic growth and a reasonable recovery in prices. B[Central Bank: Strengthen financial support for key areas such as expanding domestic demand, technological innovation, small and medium-sized enterprises, and the construction of "six networks"] On September 24, the Monetary Policy Committee of the People's Bank of China held a regular meeting for the third quarter of 2026. The meeting pointed out that it is necessary to guide large banks to play the main role of financial services in the real economy, promote small and medium-sized banks to focus on their main responsibilities and main businesses, and enhance bank capital strength. Make good use of various structural monetary policy tools, constantly improve the design and management of tools, do a solid job in the "five major articles" of finance, and strengthen financial support for key areas such as expanding domestic demand, technological innovation, small, medium and micro enterprises, and the construction of "six networks". Continue to provide financial services that support the development and growth of the private economy. Maintain the stable operation of financial markets. Effectively promote high-level two-way opening up of finance and improve economic and financial management capabilities and risk prevention and control capabilities under opening conditions. B[TD Securities: Gold is expected to hit prices above $5,000 per ounce again in 2027] On September 24, gold prices continued to fall, falling below the key support level of $4,300 per ounce. However, TD Securities believes the downside for the precious metal is limited as current market conditions are conducive to another breakout of $5,000 an ounce. Ryan McKay, senior commodity strategist at TD Securities, pointed out that although gold continues to face the adverse impact of rising interest rates, underlying investment demand remains strong. "The price of gold is about to see its next round of gains. Despite the Fed's interest rate hikes, gold is still showing strong resilience. As investor and central bank demand for gold grows again, gold is expected to hit prices above $5,000 an ounce again in 2027." A[Central Bank: RMB deposits increased by 18.99 trillion yuan in the first eight months] Central Bank data showed that at the end of August, the balance of domestic and foreign currency deposits was 355.77 trillion yuan, a year-on-year increase of 7.8%. The balance of RMB deposits at the end of the month was 347.67 trillion yuan, a year-on-year increase of 7.7%. In the first eight months, RMB deposits increased by 18.99 trillion yuan. Among them, household deposits increased by 6.99 trillion yuan, non-financial corporate deposits increased by 1.85 trillion yuan, fiscal deposits increased by 2.06 trillion yuan, and non-banking financial institution deposits increased by 6.32 trillion yuan. At the end of August, the balance of foreign currency deposits was US$1.19 trillion, a year-on-year increase of 17.3%. Foreign currency deposits increased by US$134.2 billion in the first eight months. B[Deputy Governor of the People's Bank of China, Xuan Changneng, met with Martina, President of S&P Global] September 11th, according to the central bank's official website, on September 10, Deputy Governor of the People's Bank of China, Xuan Changneng, met with Martina, President of S&P Global, and had in-depth exchanges on issues such as the current economic and financial situation in China and the world, the opening up of China's financial industry, and S&P Global's expansion in China. B[Deputy Governor of the People's Bank of China, Xuan Changneng, met with Deputy Governor of the Monetary Authority of Singapore, Liang Xinsong] September 10th, according to the central bank's official website, on September 10, 2026, Deputy Governor of the People's Bank of China, Xuan Changneng, met with Deputy Governor of the Monetary Authority of Singapore, Liang Xinsong. The two sides exchanged views on the current economic and financial situation and China-Singapore financial cooperation and other issues. B[Deputy Governor of the People's Bank of China Tao Ling attended the BRICS Finance Ministers and Central Bank Governors Meeting] September 10th, according to the official website of the People's Bank of China, on September 10, 2026, Tao Ling, Deputy Governor of the People's Bank of China, attended the second BRICS Finance Ministers and Central Bank Governors Meeting this year in Mumbai, India. The participating parties discussed the global economic situation, international financial governance, BRICS emergency reserve arrangements, cross-border payments, financial technology, sustainable finance and other issues. The meeting reviewed and adopted the "Joint Statement of BRICS Finance Ministers and Central Bank Governors".
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