The PBOC balance sheet shows the composition of the central bank's assets and liabilities. Key asset items include foreign exchange reserves (外汇占款), claims on government, and claims on other depository institutions (reflecting MLF, PSL, and other lending facilities). Key liability items include reserve money (储备货币), currency in circulation, and government deposits.
Why it matters: Changes in the balance sheet reveal how base money is being created or withdrawn. The structural shift from FX-driven base money creation to policy-tool-driven creation (claims on depository institutions) is a major theme. Rising government deposits can temporarily tighten liquidity even without policy action.