Key points:
Events
The people's Bank of China announced on April 15 that it would cut 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. After this reduction, the weighted average deposit reserve ratio of financial institutions is 8.1%. The RRR reduction released a total of about 530 billion yuan of long-term funds.
The signal significance of the release of this RRR reduction is greater than the essence
This reduction is characterized by small amplitude and fast speed. The reserve requirement reduction of 25bp was the smallest in the past years, releasing 530 billion yuan. Compared with the two reserve requirement reductions in the second half of last year, the reserve requirement was reduced by 0.5 percentage points on July 9, 2021 and 0.5 percentage points on December 6, 2021. However, the speed of the introduction of the RRR reduction policy has been significantly accelerated. As usual, it is generally announced and implemented within one to two weeks after the RRR reduction is mentioned at the national standing committee meeting. However, it takes only two days from the mention of RRR reduction to the landing of RRR reduction at this national standing committee meeting. In line with the argument that the policy should come out early, the signal of stabilizing expectations released is of great significance. On the one hand, it shows the determination and executive power of the central bank to stabilize the economy, on the other hand, it also reserves space for subsequent monetary policy.
Wide money is not equal to wide credit, and there is a transmission blocking point
Monetary policy relaxation directly affects inter-bank liquidity, but it is not a sufficient condition for credit expansion. At present, there is no shortage of liquidity in the banking system. The interest rate of pledged repo in the money market is at a low level. At the same time, the maturity of MLF this year is 600 billion yuan lower than that of last year. The real difficulty lies in how to lead the wide currency to the wide credit of the real economy. The coexistence of "wide money" and "tight credit" in the market is precisely due to the poor transmission of monetary policy, which makes liquidity idle in the financial system and can not be injected into the real economy in time and effectively.
RRR reduction does not necessarily restrict interest rate reduction
RRR reduction is a quantitative tool and interest rate reduction is a price tool. There is no conflict between the two. In the macro environment with increasing downward pressure on the economy, the combined macro monetary regulation of quantitative tools and price tools is desirable. At present, the central bank has not taken interest rate reduction measures, which may be due to two reasons: first, overseas interest rate hikes restrict China's interest rate reduction; Second, from the absolute price level, the current loan interest rate is not high. The key is that it is difficult for small, medium-sized and micro enterprises to obtain bank loans. According to statistics, the financing cost of non bank channels is basically twice or more of the bank loan interest rate. If we can help small, medium-sized and micro enterprises increase their ability to obtain bank credit, it means that it has greatly reduced the financing cost in essence. Therefore, compared with the benefits of interest rate reduction to the real economy, it may be more significant to solve the linkage relationship between financial institutions, market subjects and the government.
Risk tips
The epidemic situation in China continues; China's policy exceeded expectations; The Fed raised interest rates more than expected.
