China-Singapore Jingwei, April 25th (Dong Xiangyi) The comprehensive RRR reduction will be implemented today (25th)!

The central bank lowered the deposit reserve ratio of financial institutions by 0.25 percentage points, and the RRR cut released a total of about 530 billion yuan of long-term funds.

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RRR cut releases 530 billion long-term funds

  According to the relevant person in charge of the central bank, the RRR cut has released a total of about 530 billion yuan of long-term funds.

This RRR cut is a comprehensive RRR cut. Except for some corporate financial institutions that have implemented a 5% deposit reserve ratio, other financial institutions have generally lowered their deposit reserve ratio by 0.25 percentage points.

  For urban commercial banks that do not operate across provinces and rural commercial banks with a deposit reserve ratio higher than 5%, the deposit reserve ratio will be reduced by 0.25 percentage points, and an additional 0.25 percentage points will be reduced, which is conducive to increasing support for small and micro enterprises. and "three rural" support.

  Dong Ximiao, chief researcher of China Merchants Union Finance, said in an interview with Sino-Singapore Jingwei that after the RRR cut is implemented, financial institutions will make good use of the low-cost funds released by the RRR cut to increase support and services for the real economy.

In particular, it is necessary to highlight "precise drip irrigation" for key areas and weak links, increase support for industries such as transportation, air tourism, catering services, small and micro enterprises, and individual industrial and commercial households that are greatly affected by the epidemic, and reduce related industries. and corporate financing costs.

  Regarding the comprehensive consideration after the RRR cut, the relevant person in charge of the central bank said that the prudent monetary policy will continue to be implemented.

First, pay close attention to changes in price trends and keep prices generally stable.

The second is to pay close attention to the adjustment of monetary policies of major developed economies, taking into account internal and external balance.

At the same time, maintain a reasonable and sufficient liquidity, promote the reduction of comprehensive financing costs, and stabilize the macroeconomic market.

  It is worth noting that the above statement about "maintaining price stability" has also been mentioned again by central bank officials recently.

  On April 22, central bank governor Yi Gang said at the Boao Forum for Asia sub-forum that the primary task of China's monetary policy is to maintain price stability.

China will continue to implement a prudent monetary policy, and will comprehensively use a variety of tools to provide more support for small, medium and micro enterprises and increase support for the real economy.

  Institutional analysis believes that the official continuous high-density announcement of concern about price trends may indicate that the starting point of the next monetary policy formulation will focus more on stabilizing prices, and the room for further monetary easing may therefore be reduced.

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How about the stock market and property market?

  Previous RRR cuts are usually positive for the stock market.

  According to the analysis of Everbright Securities Research Report, since 2010, in the 20 trading days after the central bank’s past 16 comprehensive RRR cut announcements, the wind All-A Index has risen 11 times and fell 5 times, with an average increase of 2.2%.

A comprehensive RRR cut is not necessarily the starting gun of the bull market, but in most cases, it will have a certain degree of positive effect on the market.

Combined with the decline in deposit interest rates, the overall easing of monetary policy will support the stock market in the short term.

  Will bank stocks continue to be "No Extreme Tai Come"?

CICC believes that financial support for the real economy is not a unilateral interest transfer by financial institutions, but also includes policy support such as RRR cuts, re-lending, and lowering the cost of deposit liabilities. The overall impact is relatively neutral.

Compared with the pressure on interest margins, credit cost is a more important factor affecting the net profit of banks. The steady growth policy is conducive to improving the expectations of bank asset quality. The National Council mentioned that the reduction of the provision rate by banks is also conducive to maintaining a stable growth rate of net profit. .

  Regarding the property market, Li Yujia, chief researcher of the Guangdong Housing Policy Research Center, believes that a comprehensive RRR cut can further increase housing loans and promote housing consumption.

  Data show that from January to March, real estate development enterprises had 3,815.9 billion yuan in funds, a year-on-year decrease of 19.6%, and continued to maintain negative growth year-on-year, hitting a new low in recent years.

  "The RRR cut is not aimed at the property market, but because the RRR cut is aimed at easing the impact of the epidemic, promoting consumption growth, and reducing consumption costs, it actually indirectly helps to stabilize the property market." Li Yujia emphasized that in the first quarter, the property market sales, construction, Land sales fell more than expected, and a stable property market was also expected.

  Chen Xiao, a senior analyst at the Zhuge Housing Data Research Center, believes that the comprehensive RRR cut is a major benefit to the real estate market, and has positive significance for resolving the liquidity pressure of some real estate companies and improving residents' willingness to buy a house.

It is expected that in the second quarter, the capital chain of real estate companies will be tight and personal mortgage loans will decline.

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Is a rate cut still far away?

  In April, the LPR quotation remained unchanged for three consecutive months, with a 1-year LPR of 3.7% and a 5-year LPR of 4.6%.

The RRR cut has landed but the rate cut has failed. When will the next rate cut come?

  Pacific Securities believes that the May LPR may have the last interest rate cut this year.

On the one hand, the Federal Reserve is rapidly tightening monetary policy. In order to alleviate the negative effects of capital outflow, RMB exchange rate depreciation, and investor expectations reversal, the time period for the reverse operation of China and the US monetary policy cannot continue for too long; on the other hand, the weighted average of domestic financial institutions The deposit reserve ratio has dropped to 8.1%, which is comparable to the level of international emerging countries, and the room for decline is limited.

  Wang Qing, chief macro analyst at Dongfang Jincheng, predicts that my country's monetary policy will continue the basic orientation of marginal easing and timely strengthening in the process of stabilizing growth.

In the second quarter, while monetary policy focuses on structural policy tools, there is room for aggregate tools such as RRR cuts and interest rate cuts.

(Sino-Singapore Jingwei APP)

(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)

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