China’s central bank alludes to foreign factors impacting policy

China’s central bank said it will consider foreign factors and tweak its policy if necessary, in a possible recognition of external constraints on monetary easing.

The People’s Bank of China will “choose the opportunity to adjust and optimize the intensity and pace of policies based on domestic and foreign economic and financial conditions,” it said in a quarterly monetary policy report published Thursday. The publication provides a rare glimpse into the PBOC’s outlook and policy plans.

The new phrasing could be a veiled acknowledgment of adverse factors weighing on the yuan — from sticky US inflation to Donald Trump’s tariffs — that have led China to delay monetary stimulus.

Many investors and analysts expected a cut to banks’ reserve requirement ratio, which will unlock liquidity for more lending, to take place over the past two months, but it has yet to materialize.