To implement monetary policies, The People's Bank of China may apply the following monetary policy instruments:(1)to require a banking institution to place a deposit reserve at a prescribed ratio;(2)to fix the base interest rates for the central bank;(3)to handle rediscount for baking Institutions that have opened accounts in The People's Bank of China;(4)to provide loans for commercial banks;(5)to deal in State bonds and other government bonds and foreign exchange on the open market; (6)other monetary policy instrument decided by the State Council.

When applying the monetary policy instruments to implement monetary policies, The People's Bank of China may work out specific requirements and procedures.

(Lawyer Wu Yingjie)