**:Central bank.
China's Monetary Policy Implementation Report for the Fourth Quarter of 2023
2023 is a year of economic recovery after the three-year new crown epidemic prevention and control transition, and it is also the first year of the new year, under the strong leadership of the first comrade as the core, my country withstood external pressure, overcome internal difficulties, increased macroeconomic regulation and control, the national economy rebounded, and the annual gross domestic product (GDP) increased by 5 percent year-on-year2%, the transformation and upgrading have achieved remarkable results, and high-quality development has been solidly promoted. The People's Bank of China adheres to the guidance of the Thought of Socialism with Chinese Characteristics in the New Era, fully implements the spirit of the 20th National Congress of the Party, earnestly implements the decision-making and deployment of the Party, has a prudent monetary policy that is precise and powerful, strengthens countercyclical adjustment in a timely manner, and comprehensively grasps the total amount and structure, quantity and **, internal and external balance, and effectively supports the development of the real economy.
The first is to increase monetary and credit support for the economy. The two RRR cuts throughout the year released more than 1 trillion yuan of long-term funds, and the medium-term lending facility (MLF) exceeded by 25 trillion yuan, flexibly carry out open market operations, and maintain reasonable and abundant liquidity. Symposiums of financial institutions have been held on a number of occasions to guide the total amount of credit to be moderate and the pace to be stable, and to enhance the stability and sustainability of loan growth. The second is to reduce financing costs and stimulate effective demand. The two cuts in the policy rate have led to a decline in market interest rates such as the loan market ** interest rate (LPR). We should give full play to the role of the market-oriented adjustment mechanism of deposit interest rates to stabilize the cost of bank liabilities. Adjust and optimize housing credit policies, and guide commercial banks to reduce the interest rate of existing first home loans in an orderly manner. The third is to optimize the supply of funds and promote structural transformation. Issuing guiding documents for financial support for private enterprises, and implementing the action plan for supporting the financing of science and technology enterprises; We will increase the amount of re-lending to support agriculture and small enterprises by 250 billion yuan, continue to implement inclusive small and micro loan support tools and carbon emission reduction support tools, and increase the amount of collateral supplementary loans (PSL) by 500 billion yuan, so as to guide more financial resources to flow to major strategies, key areas and weak links. Fourth, it is necessary to stabilize the exchange rate and take into account the internal and external balance. We will deepen the market-oriented reform of the exchange rate, raise the macro-prudential adjustment parameters of cross-border financing and lower the foreign exchange reserve ratio in a timely manner, give full play to the role of the foreign exchange self-discipline mechanism, strengthen the guidance of expectations, regulate the supply and demand of the foreign exchange market, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Fifth, we need to address risks in key areas and ensure financial stability. Strengthen the monitoring and assessment of financial risks, and prudently handle risks in key regions and key institutions. Promote the resolution of debt risks of financial support financing platforms in an orderly manner. Strengthen the construction of a financial stability guarantee system.
Overall, the monetary policy in 2023 will adhere to the principle of stability and seek progress while maintaining stability, creating a good monetary and financial environment for the economic recovery. Monetary credit maintained a reasonable growth, and the balance of RMB loans reached 237 at the end of the year6 trillion yuan, broad money (m2) and social financing scale and stock increased by 9 percent year-on-year7% and 95%；227 trillion yuan, an increase of 1 year-on-year3 trillion yuan. The credit structure continued to be optimized, and the balance of inclusive small and micro loans and medium and long-term loans for the manufacturing industry increased by 23 year-on-year respectively at the end of the year5% and 319%；Loans to private enterprises increased by 12 percent year-on-year6%, 1. higher than the end of the previous year6 percentage points. Social financing costs have been steadily declining, and the weighted average interest rate of new corporate loans issued in December was 375%, 022 percentage points, continuing to hit a new low since statistics; The weighted average interest rate for new personal housing loans is 397%, 029 percentage points, more than 23 trillion yuan of stock of first home loan interest rate cut by 073 percentage points, reducing borrowers' interest expenses by about 170 billion yuan per year. The RMB exchange rate fluctuated in both directions, expected to converge, and remained basically stable, and the RMB exchange rate against the US dollar at the end of the year was 70920, an appreciation of more than 3% from the low point of this round.
China's development is still in an important period of strategic opportunities, the market space is broad, the industrial system is complete, the material and technological foundation is strong, the talent dividend is constantly enhanced, and the economic development has good support, but it should also be seen that the current global economic recovery momentum is differentiated, the policy adjustment of developed economies, geopolitical conflicts and other uncertainties are rising, and some difficulties and challenges need to be overcome to further promote the economic recovery in China. On the whole, the favorable conditions facing China's development are stronger than the unfavorable factors, and the basic trend of the long-term economic improvement has not changed. In the next stage, the People's Bank of China will adhere to the guidance of the Thought of Socialism with Chinese Characteristics in the New Era, completely, accurately and comprehensively implement the new development concept, adhere to seeking progress in stability, promoting stability with progress, establishing first and then breaking down, accelerate the construction of a strong financial country, optimize financial services, unswervingly follow the road of financial development with Chinese characteristics, and promote high-quality financial development. We will build a modern banking system, strengthen the counter-cyclical and cross-cyclical adjustment of macro policies, adhere to the fundamental purpose of financial services for the real economy, always maintain the soundness of monetary policy, enhance the consistency of macro policy orientation, and continue to promote the economy to achieve effective qualitative and quantitative growth.
A prudent monetary policy should be flexible, moderate, precise and effective. Reasonably grasp the relationship between the two largest financing markets of bonds and credit, accurately grasp the law and new characteristics of money and credit supply and demand, guide the reasonable growth and balanced delivery of credit, maintain reasonable and abundant liquidity, and keep the scale of social financing and the amount of money matching the expected goals of economic growth and the highest level. Strengthen policy coordination and cooperation, effectively support the promotion of consumption, stabilize investment, expand domestic demand, and keep prices at a reasonable level. We will continue to deepen the market-oriented reform of interest rates, further improve the interest rate formation mechanism of the loan market, give full play to the role of the market-oriented adjustment mechanism of deposit interest rates, and promote the steady and moderate decline of comprehensive social financing costs. Give full play to the dual functions of monetary policy tools, both in aggregate and in structure. Support the adoption of debt restructuring and other means to revitalize the stock of credit and improve the efficiency of the use of existing loans. Adhere to the focus on key points, reasonable and moderate, advance and retreat, do a good job in science and technology finance, green finance, inclusive finance, pension finance, digital finance five major articles, do a good job in the implementation of 25 measures to support the private economy, increase financial support for the construction of affordable housing, the construction of "peacetime and emergency" public infrastructure, and the transformation of urban villages. Adhere to a managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies, implement comprehensive policies, stabilize expectations, guard against the risk of exchange rate overshoot, prevent the formation of unilateral consensus expectations and self-reinforce, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. We will continue to effectively prevent and resolve risks in key areas, and resolutely adhere to the bottom line of no systemic risks.