1. The time point of this RRR reduction is in line with market expectations, but the range is lower than expectations, which mainly reflects the following three points: 1) the current market liquidity is still abundant. In addition, targeted RRR reduction and structural policies are effective; 2) Guide financial institutions to actively use the funds for reducing the reserve requirement to support industries and small, medium and micro enterprises seriously affected by the epidemic. Although the RRR reduction is lower than the adjustment practice, the targeted RRR reduction is not small, highlighting the idea of targeted solutions to structural problems; 3) The RRR reduction will reduce the capital cost of financial institutions by about 6.5 billion yuan per year. Through the transmission of financial institutions, it can promote the reduction of social comprehensive financing costs. The reason why the range of RRR reduction is restrained is that first, there is not much room for RRR reduction. Second, the current crux is that the epidemic has interrupted the rhythm of economic recovery. What the market lacks is not capital, but the willingness and confidence of residents and enterprises to spend long money.
2. The upside down of China US interest rate spread will not restrict China’s monetary policy. Referring to the performance of monetary policy during the previous round of upside down, the probability of RRR reduction and structural policy is greater than interest rate reduction. However, the current idea of continuously reducing the debt cost of financial institutions also means that interest rate reduction is still possible in the future.
Risk warning: uncertainty of epidemic situation
