Core Viewpoint - The People's Bank of China (PBOC) has released the "Monetary Policy Implementation Report for the Third Quarter of 2025," indicating multiple adjustments in policy expression, regulatory focus, and framework transformation, reflecting a precise grasp of the current economic and financial situation and clarifying future policy directions [1] Group 1: Monetary Policy Transmission Efficiency - The core expression of monetary policy shifted from "strengthening counter-cyclical adjustment" in the second quarter to "maintaining ample liquidity" in the third quarter, with market liquidity remaining reasonably abundant despite no reserve requirement ratio (RRR) or interest rate cuts [2] - The interbank money market rate DR001 has remained stable around the policy rate, while DR007 has operated at a level 10 basis points above the policy rate, indicating effective regulatory outcomes [2] - The report shows enhanced confidence and determination in monetary policy, emphasizing a stable and relatively loose environment while reducing the urgency of short-term counter-cyclical adjustments [2] Group 2: Transformation of Monetary Policy Framework - The report emphasizes maintaining exchange rate flexibility, strengthening expectation guidance, and preventing excessive exchange rate fluctuations, with an accelerated pace for the internationalization of the Renminbi and capital account convertibility [3] - Key highlights of the monetary policy framework transformation include optimizing intermediate variables, transitioning to a price-based regulatory framework, and enhancing the linkage between asset and liability interest rates for banks [3] Group 3: Structural Measures - The report introduces three new structural measures aimed at addressing developmental shortcomings: optimizing carbon reduction support tools, improving financial support mechanisms for post-poverty alleviation, and researching personal credit repair support policies to unlock consumer potential [4] - These measures reflect a targeted approach in structural monetary policy tools to address key areas and weaknesses in the economy [4]

Core Viewpoint - The internationalization of the Renminbi (RMB) faces significant challenges, with its global reserve amount projected to decrease to 246.31 billion USD by the first quarter of 2025, representing only 2.12% of total global allocated foreign reserves [1][2][3]. Summary by Sections Current Status of RMB Internationalization - As of the first quarter of 2025, the RMB ranks sixth among global reserve currencies, with a total reserve of 246.31 billion USD, following the US dollar, euro, pound, yen, and Canadian dollar [2][3]. - The RMB's share in global allocated foreign reserves is significantly lower than that of the leading currencies, indicating a need for improvement in its international status [3]. Challenges to RMB Internationalization - The depth and breadth of China's financial markets are insufficient compared to major reserve currency issuers, limiting foreign investors' willingness to hold RMB assets [4]. - The RMB lacks sufficient influence in international payment and settlement systems, relying heavily on the SWIFT system, while its own CIPS system requires further development [4]. - Policy coordination and institutional guarantees are inadequate, with China's financial market lacking the maturity and transparency found in other major economies [4][6]. Future Strategies for RMB Internationalization - Deepening financial market reforms is essential, including enhancing the transparency and legal framework of RMB financial assets and expanding access for foreign investors [7][9]. - Improving the infrastructure for cross-border RMB usage, such as accelerating the development of the CIPS system and establishing local clearing arrangements with countries along the Belt and Road Initiative [7][9]. - Cultivating a RMB-denominated asset system by encouraging domestic companies to issue RMB-denominated bonds abroad and promoting RMB settlement in commodity trading [9]. - Strengthening international monetary cooperation, particularly with emerging economies, to enhance bilateral currency swap agreements and regional currency coordination [9][10]. - Gradually advancing capital account convertibility while ensuring macro-prudential management to prevent systemic financial risks [10][12]. Conclusion - The internationalization of the RMB is a complex process that requires a proactive approach, including open financial markets, improved infrastructure, and innovative financial products, to establish the RMB as a necessary global currency [12].