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, 2022. After this reduction, the weighted average deposit reserve ratio of financial institutions is 8.1%.
At present, the economy is under downward pressure: (1) the real estate policy is still restraining demand; (2) Once again, the epidemic spread, affecting consumption and production; (3) The decline in the growth rate of overseas demand. At present, the downward pressure on China's economy is increasing. If we want to achieve the annual GDP growth target of 5.5%, we need more active monetary policy to cooperate. The credit structure needs to be optimized. In the first quarter, social finance showed the characteristics of short-term. Although the total amount of financing increased, the structure was still optimized, and the medium and long-term credit demand was still weak.
In order to increase the support for small and micro enterprises and "agriculture, rural areas and farmers", for urban commercial banks without inter provincial operation and agricultural commercial banks with deposit reserve ratio higher than 5%, an additional 0.25 percentage point will be reduced on the basis of reducing the deposit reserve ratio by 0.25 percentage point. In March, the balance of various deposits was about 243 trillion, and the deposits of non banking financial institutions were 23 trillion. The reduction of the deposit reserve ratio by 0.25% is equivalent to the release of about 530 billion. At the end of 2021, the over storage rate of financial institutions was 2%. It is expected that the over storage rate of financial institutions will decrease slightly by the end of the first quarter of 2022.
It is expected that the standard will be lowered again in the second quarter. The trend of regular deposits has not ended, and it is difficult to boost investment and consumption demand. The short-term interest rate is still high. In fact, compared with CPI rent, the current seven-day repurchase interest rate is still high. This is also the main reason why we believe that "the interest rate may be reduced by at least 50bp this year" in the weekly report 20220124.
Risk tip: China's macroeconomic policy is not as expected; The standard reduction is less than expected; Monetary policy exceeded expectations; Covid-19 outbreak again; There is a risk of large error between the predicted value and the actual value of macroeconomic indicators.
