China News Network, September 9 (Zhongxin Finance Gong Hongyu) The central bank has lowered the RRR again!
Infographic: RMB. Photo by Liu Yanghe
It is expected to release medium and long-term liquidity of more than 5000 billion yuan
On September 9, the PBOC announced that it would cut the reserve requirement ratio of financial institutions by 14.9 percentage points on September 15 (excluding financial institutions that have implemented a 0% reserve requirement ratio).
This is the second RRR cut this year, following March this year. The downward revision is the same as before. After this reduction, the weighted average reserve requirement ratio of financial institutions is about 3.7%.
The so-called RRR reduction is to increase the funds that banks can freely use by reducing the proportion of deposit reserves paid by financial institutions to the central bank in accordance with regulations.
Dong Ximiao, chief researcher of CMF Finance, told Zhongxin Finance that the RRR reduction is expected to release more than 5000 billion yuan of medium- and long-term liquidity to the banking system.
At this point, the RRR cut came earlier than expected
The central bank said that at present, China's economic operation continues to recover, endogenous power continues to increase, and social expectations continue to improve.
In this context, some analysts believe that as a highly signaling tool, the second RRR reduction this year may come in the fourth quarter. However, with the central bank's decision, the RRR cut landed earlier than expected.
"RRR reduction is necessary and important", Dong Ximiao believes that at this time, the RRR reduction is at the critical moment when China's economy is in a relay of recovery, and the central bank has implemented a comprehensive RRR reduction again after two interest rate cuts and comprehensive optimization of housing credit policies, showing that the prudent monetary policy is more resolute and powerful, carefully protecting market liquidity.
Yang Delong, chief economist of Qianhai Open Source Fund, stressed that the RRR reduction can further send a strong policy signal to the market, indicating that the central bank has the determination and ability to use a wealth of policy tools to help the real economy stabilize and recover, further stabilize market confidence and expectations, and reverse the sentiment of market players.
Infographic: People's Bank of China. Photo by Zhang Xinglong, reporter of China News Agency
It is good for real estate, stock market and other fields
Not only to boost confidence, experts believe that this RRR cut will bring tangible benefits to real estate, banks, stock markets and other fields.
Chen Wenjing, director of market research at the China Index Research Institute, said that the RRR reduction provides more long-term funds for the market, increases the liquidity of funds, is conducive to reducing the cost of funds and promoting macroeconomic recovery.
As far as real estate is concerned, Chen Wenjing believes that the stable and good macroeconomic situation is conducive to driving the expected improvement of the real estate market, and the reasonable capital needs of home buyers and enterprises are also expected to be better supported.
For banks, Dong Ximiao said that the RRR reduction will reduce the cost of capital of banks, ease the pressure of interest margin and profit decline brought about by the decline in interest rates of existing housing loans, maintain the continuity of fee reductions and concessions to the real economy, and promote the steady reduction of financing costs in the real economy. It is expected that this RRR reduction will reduce the cost of bank funds by 70 billion to 80 billion yuan per year.
In addition, on historical data, RRR cuts are also good for boosting stock markets. Yang Delong mentioned that the central bank's RRR cut is conducive to promoting the stabilization and recovery of the stock market. Overall, there are many bright spots in the August financial data, which is a significant improvement compared to July. This is an important foundation for the gradual stabilization and recovery of the capital market. (End)