The People's Bank of China has indicated it will adjust monetary policy tools in a timely manner and promote the issuance of panda bonds. At a working meeting to set the policy direction for the second half of the year, it confirmed it will continue a moderately accommodative monetary policy and maintain ample liquidity. It will also provide financial support to resolve debt risks of local government financing vehicles and promote their market-oriented transformation. Furthermore, it outlined plans to strengthen cross-border and offshore financial services in Shanghai and solidify Hong Kong's status as an offshore renminbi trading hub.
PBOC's accommodative stance may weaken CNY, making USD stronger relative to CNY.
PBOC maintains accommodative policy and ample liquidity, likely keeping yields low.