At the 2023 China-EU Financial and Investment Forum and CLF50 Annual Conference held on December 3rd, Sheng Songcheng, former Director-General of the Investigation and Statistics Department of the People’s Bank of China, stated that efforts are still needed to achieve stable economic growth next year. It is expected that an active fiscal policy will continue to be implemented next year, with monetary policy complementing it. There is relatively large policy space for reserve requirement ratio cuts. Sheng Songcheng specifically explained that the current weighted average deposit reserve ratio of financial institutions in our country is 7.4%, while interest rates are already at a historical low. Currently, LPR has reached a new low since the reform in 2019, indicating that there is more room for reserve requirement ratio cuts than interest rate cuts. Sheng Songcheng said that China’s monetary policy needs to consider internal and external balance, which is one of the reasons why our country’s interest rate cuts are relatively cautious. “The interest rate differential between the two countries and its changing trend are important factors determining exchange rates. It is expected that the stability period for Sino-US interest rate differentials will begin, so the renminbi may maintain a moderate appreciation trend but with limited magnitude.”