Chinanews.com, December 6th. According to the WeChat official account of the People’s Bank of China, in order to support the development of the real economy and promote a steady decline in comprehensive financing costs, the People’s Bank of China decided to lower the deposit reserve ratio of financial institutions on December 15, 2021. 0.5% (excluding financial institutions that have implemented a 5% deposit reserve ratio).

After this reduction, the weighted average deposit reserve ratio of financial institutions was 8.4%.

　　The People's Bank of China stated that it will continue to implement a prudent monetary policy, adhere to a stable policy, avoid flooding, take into account internal and external balances, maintain reasonable and sufficient liquidity, and maintain the growth rate of money supply and social financing at the same rate as the nominal economic growth rate. Match, strengthen cross-cycle adjustments, make overall plans for the convergence of macro policies for the next two years, support small and medium-sized enterprises, green development, and technological innovation, and create a suitable monetary and financial environment for high-quality development and supply-side structural reforms.

　　In addition, the relevant person in charge of the People's Bank of China answered reporters' questions about reducing the deposit reserve ratio of financial institutions.

A reporter asked: Does the RRR cut mean a change in the orientation of prudent monetary policy?

　　In this regard, the relevant person in charge of the central bank said that the orientation of prudent monetary policy has not changed.

The RRR cut is a regular operation of monetary policy. Part of the funds released will be used by financial institutions to return the maturity of the medium-term loan facility (MLF), and some will be used by financial institutions to supplement long-term funds to better meet the needs of market entities.

The People's Bank of China adheres to the normal monetary policy, maintains policy continuity, stability, and sustainability, does not engage in flooding, and creates a suitable monetary and financial environment for high-quality development and supply-side structural reforms.

　　Regarding the consideration of the RRR cut, the person in charge stated that the purpose of the RRR cut is to strengthen cross-cycle adjustment, optimize the capital structure of financial institutions, improve financial service capabilities, and better support the real economy.

The first is to effectively increase the long-term stable funding sources of financial institutions to support the real economy while maintaining reasonable and abundant liquidity, and enhance the financial institutions' ability to allocate funds.

The second is to guide financial institutions to actively use the RRR cut funds to increase their support to the real economy, especially small, medium and micro enterprises.

The third is that the RRR cut has reduced the funding cost of financial institutions by about 15 billion yuan per year, and the transmission of financial institutions can promote the reduction of social comprehensive financing costs.

　　In response to the issue of how much funds will be released from the RRR cut, the person in charge stated that the RRR cut is a comprehensive reduction. Except for some county-level legal person financial institutions that have implemented a 5% deposit reserve ratio, deposit reserves are generally reduced for other financial institutions. The gold rate is 0.5%. At the same time, considering that most of the financial institutions participating in the targeted reduction assessment of inclusive finance have met the assessment standards for supporting agriculture and small businesses (including individual industrial and commercial households), the policy objectives have been achieved, and the relevant financial institutions have implemented the best The preferential deposit reserve ratio, so that the RRR cut will release a total of about 1.2 trillion yuan in long-term funds.