China's central bank is likely to rely more heavily on targeted monetary policy tools rather than broad-based easing in the coming months, as policymakers sharpen their focus on improving the quality and efficiency of financial support while keeping an accommodative policy stance, analysts said.
Their comments came after the People's Bank of China said in its second-quarter monetary policy report released on Wednesday that it will "plan and introduce practical and effective incremental policy measures in a timely manner" to step up countercyclical adjustments and consolidate the country's steady economic recovery.
The report reiterated the central bank's commitment to maintaining ample liquidity, relatively accommodative financing conditions and low overall financing costs. But compared with its first-quarter report, it removed references to "guiding reasonable growth in aggregate financing", while stating that financial support has "shifted from placing greater emphasis on expanding scale to focusing more on quality and efficiency".
Pledging to strengthen financial support for domestic demand, technological innovation, as well as small, medium and micro-sized enterprises, the report provided no direct indication that broad-based tools such as across-the-board reserve requirement ratio or interest rate cuts are imminent.
