Policies expected to focus on bolstering demand, stability of yuan

China's monetary policymakers are expected to prioritize bolstering domestic demand while strengthening expectation guidance to prevent any sharp yuan depreciation in the coming year, economists and policy experts said.

Monetary easing will likely take precedence over short-term exchange rate stabilization, as steady economic growth will provide a stronger foundation in the medium and long term for the yuan, which may weaken moderately against the US dollar in the first half of 2025 and rebound later, they added.

Luo Zhiheng, chief economist at Yuekai Securities, said in an interview with China Daily that he anticipates China to increase the intensity of monetary policy easing in 2025 compared with this year — with scope for interest rate cuts of approximately 0.5 percentage point and room for reserve requirement ratio reductions of 0.5 to 1 percentage point — despite short-term pressures on the yuan exchange rate.