China's central bank said the economy grew 4.7% year-on-year in the first half of 2026 as moderately accommodative monetary policy kept liquidity ample, borrowing costs low and the renminbi broadly stable. In its second-quarter 2026 monetary policy implementation report, the People's Bank of China outlined how it used reverse repos, medium-term lending facilities (MLF, central bank medium-term funding for banks) and government bond transactions to manage liquidity, while refining short-end rate control by adding an overnight reverse repo operation and narrowing the temporary repo corridor to 50 basis points from 70. The PBOC also launched a repo facility for overseas central banks to support renminbi liquidity management and bond allocation, cut rates on structural policy tools by 0.25 percentage points, and set up a 1 trillion yuan private enterprise relending facility. By end-June, outstanding aggregate social financing increased 7.4% from a year earlier, M2 rose 8.0%, and the overnight repurchase rate DR001 averaged 1.31% in the first six months. Newly issued corporate loan rates in June were about 3.0%, down around 20 basis points from a year earlier, while new personal housing loan rates were about 3.1%, roughly unchanged. The report said credit growth in priority sectors including sci-tech, green, inclusive, elderly care and digital economy loans outpaced overall loan growth. The renminbi closed at 6.7852 per U.S. dollar at end-June, up 3% from end-2025, while the CFETS renminbi exchange rate index rose 4.7% to 102.59. Looking ahead, the PBOC said it would maintain ample liquidity and relatively loose social financing conditions, coordinate with fiscal policy, improve rate transmission, preserve exchange-rate flexibility and guard against overshooting risks as it confronts a more volatile external environment.