Overview

• The central bank’s second-quarter report pledges a moderately loose stance, abundant liquidity, and lower overall social financing costs.
• The report prioritizes improving fund-use efficiency and curbing idle capital circulation to channel money into the real economy.
• Central bank data show deposits at nonbank financial institutions rose by 2.14 trillion yuan in July, pointing to faster flows into equities.
• Analysts say cuts to the reserve requirement ratio or policy rates look unlikely in the near term due to a pickup in core inflation, with broader easing possible later in the year depending on data.
• Policy support is expected to come through operations such as the medium-term lending facility and open-market repos while officials watch Federal Reserve signals from Jackson Hole.