On April 13, the People's Bank of China reported to the Committee of Finance and Economy of the National People's Congress on the implementation of the monetary policy in the first quarter of 2006.

On April 14, with the State Council authorization, the People's Bank of China issued the No.5 Public Announcement to adjust 6 foreign exchange administration policies governing foreign exchange accounts under the current account, foreign exchange sale and payment in trade of services, individual's foreign exchange purchase, overseas wealth management business conducted by banks on behalf of their clients and external financial investment of insurance and securities companies.

On April 18, the People's Bank of China, together with the China Banking Regulatory Commission and the State Administration of Foreign Exchange issued the Provisional Administrative Rules on the Overseas Wealth Management Business of Commercial Banks on Behalf of Their Clients (PBC Document [2006] N0.121) to allow commercial banks to invest in overseas financial products on behalf of domestic institutions and individuals.

On April 24, the People's Bank of China and the China Banking Regulatory Commission jointly issued the Guidance on Examination of the Redemption of Special Central Bank Bills for the Pilot Reform of Rural Credit Cooperatives (PBC Document [2006] No. 130) to clarify standards and procedures in examining the redemptions and facilitate qualified Rural Credit Cooperatives to redeem the special bills in time.

On April 28, the benchmark-lending rate of financial institutions was raised. The one-year benchmark lending rate was raised by 0.27 percentage points from 5.58 percent to 5.85 percent, and other lending rates were also adjusted accordingly. The deposit rates of financial institutions remained unchanged.

On May 18, the People's Bank of China and the China Banking Regulatory Commission jointly submitted the Report on Summarization of Pilot Credit Assets -backed Securitization (PBC Documents [2006] No. 170) to summarize experiences, prudently expand the scope of experiment and steadily press ahead with the experiment.

On May 25, the Supplement to China Monetary Policy Report - China Regional Financial Performance Report in 2005 was published.

On May 31, China Monetary Policy Report, Quarter One, 2006 was released.

On June 1, the Examination and Appraisal Committee of the People's Bank of China on Issuance and Redemption of the Special Central Bank Bills for Pilot Reform of the Rural Credit Cooperatives decided at its fifth regular meeting to redeem special central bank bills totaling 0.98 billion yuan to RCCs in 18 counties (cities) in 6 provinces and municipalities including Jiangsu Province, marking the official start of special bills redemption for the pilot reform of RCCs. At the same time, special central bank bills totaling 0.34 billion yuan were issued to RCCs in 34 counties (cities) in 3 provinces and municipalities including Xinjiang Autonomous region.

On June 2, the Guidance of the People's Bank of China on Market Entry of Foreign Exchange Primary Dealers was issued to provide concrete measures in introducing foreign exchange primary dealers in the inter-bank foreign exchange market.

On April 27, May 18 and June 13, the People's Bank of China held window guidance meetings respectively to notify commercial banks the substance of the State Council meeting, and urged them to comprehensively, correctly and actively implement the macro-adjustment policies formulated by the central government, extend loans in a reasonable and balanced manner, and strengthen the role of finance in the improvement of macro-adjustment.

On June 16, the Monetary Policy Committee of the People's Bank of China held its second quarterly meeting in 2006. The Committee agreed that the economy had maintained its steady and relatively fast growth momentum. The Committee stressed that, domestic consumption demand should be enhanced; investment structures should be optimized to check the investment growth momentum; the adjustment of industrial structure and international trade structure should be promoted and efforts should be made to realize balanced international payments. The Committee conducted analysis of the objective and measures of the monetary policy in the next stage, and agreed to continue the sound monetary policy, strengthen management on banking system's liquidity, further moderate the excessive growth of money and credit; accelerate the development of direct financing, and promote the balanced development of financial market; improve the managed floating exchange rate regime according to the principle of self-initiated, controllable and gradual reform.

On June 16, with the State Council approval, the PBC announced the decision to raise the RMB reserve requirement ratio of deposit-taking financial institutions by 0.5 percentage points to 8 percent. The reserve requirement ratio of rural credit cooperatives (including rural cooperative banks) remained unchanged.

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