China's central bank to adjust policy tools, support panda bonds

China's central bank has pledged to adjust its monetary policy tools in a timely manner and maintain an appropriately loose policy with ample liquidity, according to a statement released on Sunday. The People's Bank of China (PBOC) also committed to facilitating the issuance of panda bonds and supporting the resolution of debt risk for local government financing vehicles.

The PBOC's work meeting, which mapped out plans for the second half of the year, emphasized steady promotion of high-level financial market opening and advancing domestic and international infrastructure cooperation. The central bank aims to enrich liquidity management and risk hedging tools.

This announcement follows a call from the Communist Party's Politburo for accelerated fiscal spending on already budgeted infrastructure projects. Recent data showed China's economic growth slowed to 4.3% in the second quarter, missing the lower end of its full-year target. The Politburo acknowledged economic difficulties and challenges, stressing the need to enhance the flexibility and forward-looking nature of monetary policy.