[Explanation] On December 6, the People's Bank of China stated that it decided to lower the deposit reserve ratio of financial institutions by 0.5 percentage points on December 15, 2021 (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%.
What are the considerations for the RRR cut at this time?
Experts said that the purpose of this RRR cut is to strengthen inter-cyclical adjustments, and it is time to respond to the downward pressure on economic growth through the RRR cut.
[Concurrent] Associate Professor, Guanghua School of Management, Peking University
This is because since the third quarter, the downward pressure on China's economy has gradually increased. On the one hand, we are facing the risk of more epidemic spreading, rising prices of production materials, and more complicated changes in the global economy.
Therefore, in order to ensure that our economy can grow relatively steadily at the end of this year (2021) and the first half of next year (2022), it is the most important reason to adopt monetary policy in a timely manner.
[Explanation] In addition, the RRR cut can also optimize the capital structure of financial institutions and reduce the overall social financing costs.
[Concurrent] Associate Professor, Guanghua School of Management, Peking University
This time it dropped 0.5% and released 1.2 trillion yuan of funds.
Then these basic currencies can be supplied to the society through the credit of commercial banks. The first is to increase the amount of credit in the society and increase liquidity. The second is to reduce the comprehensive financing cost of our society, which can help small and medium financial institutions. , Prevent and defuse systemic financial risks.
This is also an important aspect of consideration.
[Explanation] Experts said that the RRR cut is a regular operation of monetary policy, creating a suitable monetary and financial environment for high-quality development and supply-side structural reforms, and the orientation of prudent monetary policy has not changed.
[Concurrent] Associate Professor, Guanghua School of Management, Peking University
The adjustment of the reserve requirement ratio is a very important tool in China's monetary policy, and it should also be regarded as one of the "Dinghai Shenzhen".
We also lowered the RRR in July this year (2021). We are now lowering the RRR once in December. I think the structure of reducing the RRR twice a year is relatively normal.
In the current situation where global monetary policy is turning, we still adhere to a prudent monetary policy, which is flexible and appropriate.
We are now under relatively heavy pressure to stabilize growth, and we have adopted some supportive measures.
In fact, we have also adopted a lot of structural monetary policies to provide targeted support for some industries and industries that we need to support, so I think in general we are still "precise drip irrigation" instead of "overflow irrigation". In this way To stabilize growth.
Reporting from Beijing by reporter Cheng Yu
Editor in charge: [Ji Xiang]