The 2026 People's Bank of China working conference was held from January 5 to 6. The conference emphasized “flexible and efficient use of various monetary policy tools such as interest rate cuts to maintain abundant liquidity”, etc. Wang Qing, chief macro analyst at Dongfang Jincheng, predicts that in 2026, the central bank will cut interest rates 2 times, with interest rate cuts of 20 basis points to 30 basis points. Preliminary estimates are that interest rates will be cut once each in the first half of the year and the second half of the year. Furthermore, from the perspective of stopping the decline and stabilizing the real estate market, it is also possible to implement targeted interest rate cuts on residential mortgages in 2026 by individually guiding LPR with a term of 5 years or more to a relatively large decline. The central bank will downgrade 1 to 2 times in 2026, with a range of 0.5 percentage points to 1 percentage point. Next, we can focus on whether the downgrade can be implemented before the Spring Festival.

The 2026 People's Bank of China working conference was held from January 5 to 6. The conference emphasized “flexible and efficient use of various monetary policy tools such as interest rate cuts to maintain abundant liquidity”, etc. Wang Qing, chief macro analyst at Dongfang Jincheng, predicts that in 2026, the central bank will cut interest rates 2 times, with interest rate cuts of 20 basis points to 30 basis points. Preliminary estimates are that interest rates will be cut once each in the first half of the year and the second half of the year. Furthermore, from the perspective of stopping the decline and stabilizing the real estate market, it is also possible to implement targeted interest rate cuts on residential mortgages in 2026 by individually guiding LPR with a term of 5 years or more to a relatively large decline. The central bank will downgrade 1 to 2 times in 2026, with a range of 0.5 percentage points to 1 percentage point. Next, we can focus on whether the downgrade can be implemented before the Spring Festival.