Wanjia Fund: RRR reduction promotes bank credit derivatives and supports the real economy

On April 15, the people's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25 (excluding financial institutions that have implemented the 5% deposit reserve ratio). For urban commercial banks without inter provincial operation and rural commercial banks with deposit reserve ratio higher than 5%, an additional 0.25 percentage point will be reduced.

For this RRR reduction, Yu Kun, a Macro Analyst of 10000 funds, said that the RRR reduction promotes bank credit derivation, supports the real economy and hedges the impact of the epidemic. The release of 530 billion yuan of long-term funds from the RRR reduction is conducive to promoting banks to increase their support for entities, as well as supporting industries and small, medium and micro enterprises seriously affected by the epidemic. In addition, the RRR reduction can reduce the capital cost of financial institutions by 6.5 billion yuan per year, thus promoting the decline of comprehensive financing costs.

On the whole, Yu Kun believes that the central bank's total easing efforts remain relatively restrained, which may be due to the following reasons: first, the current liquidity environment is generally loose; Second, overseas central banks are still in the stage of rapid tightening. The general tone of "internal focus" of the central bank remains unchanged, but it also needs to take into account the internal and external balance. "In the future, China's economy is still the dominant variable in the direction of monetary policy, and the monetary policy will remain loose. The policy focus should be on credit, supplemented by money." Yu Kun said, "the overall bond market is still in a volatile pattern, the liquidity environment remains loose and continues to support the medium and short-term bond arbitrage space."

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