The People's Bank of China Monetary Policy Committee's first-quarter meeting proposed a new initiative: "Standardize credit market operating behaviors and reduce financing intermediary costs." Experts suggest that subsequent measures may prioritize lowering service fees, channel fees, and similar charges.

By Economic Daily reporter | Zhang Shoulin Economic Daily editor | Wei Wenyi

On March 31, according to the official website of the People’s Bank of China (hereinafter referred to as the “PBOC”), the PBOC’s Monetary Policy Committee held its 2026 first-quarter regular meeting on March 26.

A reporter from The Economic Daily (hereinafter referred to as “Economic Daily reporter”) noted that, compared with the notice from the previous quarter’s regular meeting, the PBOC’s latest notice on monetary policy thinking newly added: “standardize business practices in the credit market and reduce financing intermediary fees.”

In response to the above new wording in this regular meeting, Mingming Team of CITIC Securities, led by its chief economist, analyzed that going forward, compared with broad-based interest rate cuts, expenses such as service fees and channel fees may be reduced first.

Standardize business practices in the credit market and reduce financing intermediary fees

The first-quarter regular meeting analyzed domestic and international economic and financial conditions, and believed that China’s economic operations are generally steady, with progress while maintaining stability, and that high-quality development has achieved new results. However, there are still problems and challenges such as strong supply and weak demand and external shocks. To continue implementing a moderately loose monetary policy, increase efforts in counter-cyclical and cross-cyclical adjustments, better play the dual role of monetary policy tools in both quantity and structure, strengthen coordination and cooperation between monetary and fiscal policies, and promote stable economic growth and a reasonable rebound in prices.

Image source: PBOC official website

Economic Daily reporter noted that, compared with the previous quarter’s analysis of domestic and international economic and financial conditions, the latest regular meeting newly added the wording: “still facing problems and challenges such as strong supply and weak demand and external shocks,” while the previous quarter’s corresponding wording was “still facing problems and challenges such as prominent contradictions between strong supply and weak demand.”

Mingming Team analyzed that in the next stage, the PBOC may pay even more attention to offsetting the domestic spillover effects from factors such as overseas geopolitical risks and trade conflicts.

The first-quarter regular meeting studied the main considerations for monetary policy in the next stage, and suggested giving full play to the integrated effects of incremental policies and stock policies, comprehensively applying various tools, strengthening monetary policy regulation and control, and, based on domestic and international economic and financial conditions and the operation of financial markets, properly grasping the intensity, pace, and timing of policy implementation. Keep liquidity ample so that the growth of the scale of social financing and money supply growth are aligned with the targets for economic growth and expectations for the overall price level. Strengthen the guiding role of the PBOC’s policy interest rates, improve the market-based interest rate formation and transmission mechanism, give full play to the market interest rate pricing self-discipline mechanism, and strengthen the implementation and supervision of interest rate policy. Standardize business practices in the credit market and reduce financing intermediary fees, to promote social comprehensive financing costs operating at a low level. From a macro-prudential perspective, observe and assess the operation of the bond market, and pay attention to changes in long-term yields. Ensure the smooth transmission mechanism of monetary policy and improve the efficiency of fund use. Enhance the resilience of the foreign exchange market, stabilize market expectations, and keep the RMB exchange rate basically stable at a level consistent with reasonable and balanced fundamentals.

Mingming Team stated that, compared with the previous quarter’s regular meeting, the latest regular meeting, while maintaining social comprehensive financing costs at a low level, introduced new wording. Regarding the cost-reduction goal, the meeting continued the earlier wording of “promote social comprehensive financing costs operating at a low level,” but on that basis newly added: “standardize business practices in the credit market and reduce financing intermediary fees.”

Specifically, “financing intermediary fees” refer to various additional expenses incurred by enterprises or individuals in the process of obtaining financing, besides principal and interest, and they are an important component of comprehensive financing costs. Mingming Team analyzed that going forward, compared with broad-based interest rate cuts, expenses such as service fees and channel fees may be reduced first.

Optimize tool management and maintain stable operation of financial markets

The first-quarter regular meeting pointed out that it is necessary to guide major banks to play the main role in providing financial services to the real economy, and to push smaller banks to focus on their primary responsibilities and core businesses, thereby enhancing banks’ capital strength. Make good use of various structural monetary policy tools, optimize tool management, and solidly carry out the work on the “five major endeavors” in financial services, strengthening financial support for key areas such as expanding domestic demand, scientific and technological innovation, and small and micro enterprises. Continue to provide financial services to support the development and growth of the private economy. Maintain 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 conditions of opening up.

Mingming Team stated that, compared with the previous quarter’s regular meeting, in the briefing of the latest regular meeting, for structural monetary policy tools, the meeting continued to emphasize doing a good job in the “five major endeavors” in financial services, and the overall tone and direction of serving the real economy have not changed. However, the meeting newly proposed “optimize tool management,” which may correspond to the appropriate entry and exit of stock policy tools in the future, and the positioning of structural tools is not a disguised “liquidity flood.”

In addition, Mingming Team pointed out that, with regard to financial stability, the latest meeting removed the content about “making good use of swap facilities among securities, funds, and insurance companies and loans to promote stock buybacks and increases, exploring normalized institutional arrangements, and maintaining the stability of the capital market,” and instead mentioned “maintain stable operation of financial markets.” This shows that this meeting of the PBOC weakened direct statements about the capital market, and instead used a more macro concept of “financial markets.” In other words, the PBOC is paying more attention to the stability of financial markets and the system.

Disclaimer: The content and data in this article are for reference only and do not constitute investment advice. Please verify before use. Any actions taken are at your own risk.

Cover image source: Economic Daily Media Resource Library