China cuts interest rates on structural monetary policy tools by 0.25 percentage points

The People's Bank of China (PBOC) Thursday announced a cut in interest rates on all structural monetary policy tools by 0.25 percentage points as the country continues to implement a moderately loose monetary policy in 2026.

Zou Lan, spokesperson and deputy governor of the PBOC, said at a press conference held by the State Council Information Office that the move aims to increase banks' credit supply to key areas.

Meanwhile, the central bank will improve structural toolkits to further promote economic structural improvement and upgrading, Zou said

"The interest rates on various structural monetary policy tools will be lowered by 0.25 percentage points. The one-year relending rate will be cut from the current 1.5 percent to 1.25 percent while the interest rates for other maturities will be adjusted accordingly," said Zou.

Structural monetary policy tools are central bank instruments designed to incentivise banks to readily allocate credit resources to targeted areas, such as sci-tech, green development and financial inclusion by providing funds at preferential interest rates via its lending facilities.