DeepDive: Changes in the Monetary Policy Toolbox

Last week, the governor of the PBoC hinted at a number of potential changes to the central bank's monetary policy toolbox, including government bond trading, a greater focus on price-based monetary instruments, and changes to the definition of narrow and broad money supply. Our latest DeepDive has more.

Last week, PBoC Governor Pan Gongsheng outlined a range of potential changes to the central bank’s monetary policy toolkit, including a greater shift from quantity-based to price-based policy instruments, with implications for policy rate tools; a change in the statistical scope of broad and narrow money supply; and the potential for the central bank to trade government bonds as a tool to manage liquidity.