The main monetary policy objectives of the People’s Bank of China (PBoC) are to protect price stability, including exchange rate stability, and promote economic growth. China’s central bank also intends to implement financial reforms such as the opening and development of the financial market.

PBoC is state-owned by the People’s Republic of China (PRC), so it is not considered an autonomous institution. The secretary of the Committee of the Communist Party of China (CPC), not the governor, has the key influence on the management and management of the PBoC. However, Mr. Gongsheng currently holds both positions.

Unlike Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its goals. The primary tools include the seven-day repo rate (RRR), the medium-term credit facility (MLF), foreign exchange interventions and the reserve requirement ratio (RRR). However, the China Reference Rate (LPR) is the benchmark interest rate. Changes in LPR directly affect the rates you have to pay on the loan and mortgage market and the interest rates on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese renminbi.

Yes, there are 19 private banks in China – that’s a compact part of the financial system. According to The Straits Times, the largest private banks are digital lenders WeBank and MYbank, backed by tech giants Tencent and Ant Group. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.