China News Service, January 25 (China News Financial Reporter Zuo Yukun) At the beginning of the year, which attracted much attention, the central bank issued a gift package that "exceeded expectations".

　　On January 24, Pan Gongsheng, Governor of the People's Bank of China, stated at a press conference of the State Council Information Office that the deposit reserve ratio will be officially lowered by 0.5 percentage points starting from February 5, which will provide the market with long-term liquidity of approximately 1 trillion yuan.

　　At the same time, the central bank lowered the re-lending and rediscount rates to support agriculture and small businesses by 0.25 percentage points on January 25, and continued to promote a steady decline in comprehensive social financing costs.

  Data map: People's Bank of China.

Photo by China News Service reporter Zhang Xinglong

First RRR cut this year

　　“The timing and scale of this RRR cut exceeded market expectations, reflecting that the central bank’s goal of supporting the recovery of the real economy is very clear.” Ming Ming, chief economist of CITIC Securities, said that from the perspective of operation methods, the person in charge of the central bank mentioned the use of It is not uncommon for deposit reserve instruments and "predictions of RRR cuts" to be announced, but direct announcements of RRR cuts at press conferences are relatively rare.

　　Chen Wenjing, market research director of the China Index Research Institute, pointed out that this is the first RRR cut in 2024, and the RRR cut is relatively strong.

After this reduction, the weighted average deposit reserve ratio of financial institutions will be approximately 7.0%.

　　The so-called RRR cut means lowering the deposit reserve ratio.

After the RRR cut, the amount of money that commercial banks were locked up by the central bank in accordance with the law was reduced, and the amount of money that could be used freely increased accordingly.

Dong Ximiao, chief researcher of China Merchants Union, believes that it is necessary and urgent to lower the required reserve ratio at this time.

　　"Although many domestic economic indicators are currently recovering, the recovery trend is not very stable, especially the confidence and expectations of business entities still need to be further boosted. At this time, the announcement of a larger RRR cut sends a clear policy signal to the market , will help boost the confidence of business entities and investors, better support the recovery of the economy, and also help stabilize the capital market." Dong Ximiao said.

Largely exceeded market expectations

　　"The most direct effect of lowering the reserve requirement ratio is to improve the current liability situation of the banking system, effectively enhance banks' ability to support real enterprises in credit extension, and better support the real economy, especially small, medium, micro, and private enterprises." China Chief Economist Forum Chairman Lian Ping said.

　　Although it is a familiar monetary policy tool, in terms of scale, the magnitude of this RRR cut is also larger than market expectations.

Dong Ximiao mentioned that the two RRR cuts in 2023 will both be 0.25 percentage points, and this time the RRR cut will be 0.5 percentage points, which is twice the regular RRR cut, providing the market with long-term liquidity of approximately 1 trillion yuan, with annual reductions Bank costs exceed 12 billion yuan.

　　Why choose this time at the beginning of the year to lower the reserve requirement ratio?

Yang Chang, chief analyst at Zhongtai Securities, believes that releasing long-term liquidity will help prevent capital shortages at the beginning of the year and create a better monetary environment.

　　"Judging from historical data, January is a relatively high level for new RMB loans. For example, it reached 4.9 trillion in January 2023, which is significantly higher than other months of the year. The deposit reserve ratio was lowered in advance to release corresponding liquidity. It will help avoid financial tensions, achieve a good start for the economy at the beginning of the year, and create a more favorable monetary environment." Yang Chang explained.

  Data map.

Photo by China News Service reporter Wei Liang

"Combination punch" of RRR cut + targeted interest rate cut

　　It is worth noting that this time the central bank announced both a reserve requirement ratio cut and a re-lending interest rate cut.

Analysts believe that although there have been operations of RRR cuts + targeted RRR cuts before, the model of RRR cuts + targeted interest rate cuts is rare, showing the current central bank's monetary policy's efforts in inclusive finance and its pursuit of a precise and effective tone.

　　Chen Wenjing pointed out that the re-loan rediscount rate to support agriculture and small businesses will be reduced from 2% to 1.75%. The interest rate of this monetary instrument has not been adjusted since December 2021.

This operation can effectively reduce the financing costs of "agriculture, rural areas and farmers" and small and micro enterprises, meet the financing needs of enterprises, and will also help push down the LPR (loan market quotation rate).

　　Regarding the "combination punch" of the two tools, Lian Ping said that the RRR cut can release long-term liquidity and create more broad money supply through financial institutions; coupled with structures such as re-lending to support agriculture and small businesses, rediscount rates, and PSL It is a sexual tool that can increase the total supply of funds in the market.

When the demand for funds is certain, it can play a role in pushing the actual interest rate downward.

How does it affect the stock market and property market?

　　"Recently, both A-shares and Hong Kong stocks have experienced continuous adjustments. This favorable policy can be regarded as timely. It supports the development of the capital market from a policy perspective and is expected to reverse the market's pessimistic expectations." Yang Delong, chief economist of Qianhai Kaiyuan Fund, said, in conjunction with the State Council on the same day The State-owned Assets Supervision and Administration Commission stated that it will further study the inclusion of market value management in the performance evaluation of central enterprise leaders, which can stabilize the confidence and patience of investors.

　　He believes that although the market trend is still in the process of bottoming out, with the accumulation of positive policies, the market may enter a rebound stage, and the market outlook is expected to stabilize and reverse.

　　"Previous RRR cuts will involve the issuance of bank loans, especially housing loans." Yan Yuejin, research director of E-House Research Institute, said that this year there are many key areas that require loan disbursement, and there is a high urgency for funds to be in place. The RRR cut has a positive supporting effect on various real estate subdivisions.

　　Zhang Bo, president of 58 Anjuke Research Institute, also mentioned that the effect of the RRR reduction needs to be realized through the circulation of deposits and loans of commercial banks, and how to combine the "three no less" and the "white list of real estate companies" system to make it more effective. In order to promote the clearing of real estate risks and ensure the stable operation of the real estate market, follow-up detailed implementation is still needed.

  Data map: Aerial photography of real estate.

Photo by Chen Guanyan

Is there still room for interest rate cuts?

　　On January 22, the first LPR of 2024 was released. The 1-year and 5-year and above LPRs were both unchanged from the previous month, and have been "on hold" for 5 consecutive months.

After the RRR cut is implemented, whether there will be further interest rate cuts in the future is also a topic that the market will pay attention to next.

　　Pan Gongsheng said that in 2024, a variety of monetary policy tools will be used comprehensively to maintain reasonable and sufficient liquidity so that the scale of social financing and money supply match the expected goals of economic growth and price levels.

We will grasp the rhythm of the balanced release of new credit and enhance the stability of credit growth.

In terms of structure, we will continue to optimize the credit structure, increase financial support for private enterprises and small and micro enterprises, implement 25 financial measures to support the private economy, and improve the quality and efficiency of financial services to the real economy.

　　"The Central Economic Work Conference requires a prudent monetary policy that is flexible, appropriate, precise and effective. In the next step, a variety of monetary policy tools should be used comprehensively, both quantity and price should be considered, and long-term and short-term measures should be combined to ensure more abundant liquidity in terms of total volume and moderate price reduction for society. Comprehensive financing costs will further stabilize the confidence and expectations of operating entities." Dong Ximiao believes.

　　He predicts that in the next step, the central bank will continue to take measures such as lowering reserve requirements and interest rates to guide banks to lower deposit interest rates, further reduce bank capital costs, guide LPR, especially LPR with a maturity of more than 5 years, to moderately decrease, help reduce the financing costs of operating entities, and further stimulate effective financing. demand and create a more suitable monetary and financial environment for the economy to achieve a good start and continue to rebound in 2024.

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