Recently, under the influence of repeated epidemics and other epidemics, the downward pressure on the economy has increased, and the policy of stabilizing growth has increased. Following the successive signals released by the National Standing Committee and the central bank on April 13 and 14, on April 15, the RRR cut was "officially announced" as scheduled.
According to the announcement of the central bank on April 15, it decided to reduce the reserve requirement ratio of financial institutions by 0.25 percentage points on April 25 (excluding financial institutions that have implemented a 5% reserve requirement ratio). This time, it is a comprehensive reduction in the RRR, releasing a total of about 530 billion yuan of long-term funds, supporting the development of the real economy and promoting the stabilization and decline of comprehensive financing costs.
This is also the second RRR cut after 4 months after December last year, how will it affect the real economy, and how will it affect the stock market and property market? On April 15, the interest rate of the monetary policy tool MLF (Medium-term Lending Facility) remained unchanged, after this RRR cut, is the probability of "interest rate cut" still high?
The central bank 'officially announced" the reduction of the RRR by 0.25 percentage points, which was slightly lower than market expectations, releasing a total of 530 billion long-term funds
According to the announcement of the central bank on April 15, it decided to reduce the reserve requirement ratio of financial institutions by 0.25 percentage points on April 25 (excluding financial institutions that have implemented a 5% reserve requirement ratio). In order to increase support for small and micro enterprises and "three rural areas", for urban commercial banks that do not operate across provinces and rural commercial banks with a deposit reserve ratio higher than 5%, on the basis of reducing the deposit reserve ratio by 0.25 percentage points, an additional 0.25 percentage points will be reduced. After this reduction, the weighted average reserve requirement ratio of financial institutions is 8.1%.
"The RRR cut is a comprehensive RRR cut, releasing a total of about 530 billion yuan of long-term funds." The relevant person in charge of the central bank said in response to a reporter's question.
The market's expectations for this RRR cut are relatively sufficient. On March 11, the central bank released the Financial Data for February, because the social financing and credit increment are weak, many industry institutions believe that the policy still needs to be strengthened; at that time, some institutions believed that due to factors such as overseas interest rate hikes and high inflation rates, they may not cut interest rates. However, after the impact of the multiple sporadic epidemics in China, the difficulties of market players increased, and the industry more and more unanimously believed that the window period for RRR cuts and interest rate cuts was approaching, and the probability of RRR cuts was higher than that of interest rate cuts. In the past month, a number of blockbuster meetings have also sent relevant signals, requiring policies to come forward.
It is worth mentioning that the previous reduction in the RRR expected by some industry institutions was 0.5 percentage points, and the two RRR cuts in July and December last year were 0.5 percentage points, while this time it was only 0.25 percentage points. In this regard, Zhou Maohua, an analyst in the financial market department of Everbright Bank, analyzed the Shell financial reporter of the Beijing News that on the one hand, from the financial data of the first quarter, credit delivery is relatively strong, and the central bank flexibly adjusts the monetary policy; on the other hand, the domestic deposit reserve ratio is at the international medium level, relative to some emerging economies, the deposit reserve ratio is not high, the central bank cherishes the normal monetary policy space, and pays more attention to policy precision; in addition, the central bank is also vigilant about the potential spillover impact of the sharp turn in the policy of developed economies.
Guide financial institutions to benefit the real economy, and the tone of prudent monetary policy remains unchanged
In layman's terms, the reserve requirement ratio refers to the need for commercial banks to pay reserves to the central bank in proportion to each deposit they absorb. Assuming that the reserve ratio is 9%, the bank will deposit 9 yuan to the central bank for every 100 yuan of deposits. And a "RRR cut" (lowering the reserve ratio) allows banks to keep more money for themselves.
"The central bank helps to provide low-cost, long-term and stable liabilities for bank financial institutions by reducing the RRR, and enhances the ability of banks to expand credit, on the one hand, to guide financial institutions to reasonably benefit the real economy and reduce the comprehensive financing costs of enterprises; on the other hand, to guide financial institutions to increase long-term credit support for manufacturing enterprises." In particular, we will increase the support for small and micro private enterprises, green development, manufacturing and other key emerging areas. Zhou Maohua said.
The relevant person in charge of the central bank also stressed the purpose of supporting the entity in response to a reporter's question. The person in charge said that the current liquidity has been at a reasonable and sufficient level. The purpose of this RRR reduction is to optimize the capital structure of financial institutions, increase the long-term stable source of funds of financial institutions, enhance the ability of financial institutions to allocate funds, and increase support for the real economy. The second is to guide financial institutions to actively use RRR reduction funds to support industries and small and medium-sized enterprises seriously affected by the epidemic. Third, the reduction in the RRR reduces the cost of funds of financial institutions by about 6.5 billion yuan per year, and can promote the reduction of social comprehensive financing costs through the transmission of financial institutions.
"In the context of the current triple pressure on economic development, the central bank's timely reduction of the RRR reflects the forward-looking monetary policy, which is conducive to stabilizing market expectations, enhancing the confidence of market players, improving and expanding aggregate demand, and creating positive conditions for stabilizing the macroeconomic market and maintaining economic operation in a reasonable range." Wen Bin, chief researcher of China Minsheng Bank, said.
The relevant person in charge of the central bank also said that after the RRR cut, it will continue to implement a prudent monetary policy. The first is to pay close attention to changes in price trends and maintain overall price stability. The second is to pay close attention to the adjustment of monetary policy in major developed economies and take into account internal and external balances. At the same time, we should maintain reasonable and sufficient liquidity, promote the reduction of comprehensive financing costs, and stabilize the macroeconomic market.
It is expected to boost the confidence of the stock market and the property market and accelerate the release of property demand
The recent stock market shock, how will the RRR cut affect the stock market?
Industrial Securities believes that the landing of the RRR is expected to boost market sentiment, the probability of market rise in the week after the landing of the previous RRR cuts is higher, and the probability of the ChiNext index and the CSI 300 rise is 60%; and from the median rise and fall, the ChiNext index performs better than the CSI 300 in the week after the RRR cut, and the growth and consumption in style are better than the cycle and finance.
Pan Helin, co-director of the Digital Economy and Financial Innovation Research Center of Zhejiang University International United Business School, told reporters that the biggest beneficiary of the RRR cut is finance, and big finance may be boosted by this, but the supply chain difficulties caused by the epidemic will still affect the performance of some enterprises at this stage, thus having a restraining effect on stock prices. This effect will continue until the end of the current round of the epidemic.
For the impact of the property market, Pan and Lin believe that from the perspective of the property market, the pressure on real estate enterprises may be reduced after the RRR cut, and the pressure on owners who need to buy a house and mortgage will also be reduced, which is a good aspect, which can greatly alleviate the financing pressure of enterprises, thereby enhancing the liquidity of enterprises and preventing defaults. However, the turnover of the property market may not be much improved, and major cities, such as Shanghai, Guangzhou and other cities, are still the top priority at this stage.
Zhongyuan Research Institute believes that after the reduction of the RRR, it will help the reduction of mortgage interest rates to spread in more cities, thereby boosting market confidence and accelerating the release of property market demand.
For the bond market, Wen Bin said that the RRR cut will promote banks to do a good job in asset and liability management, increase the allocation of interest rate bonds, and it is expected that the yield of treasury bonds will be stable and decreasing, and will drive the financing cost of corporate bonds down.
The LPR is expected to be lowered this month, and the interest rate on policy instruments is still likely to decline in the second quarter
On the morning of the same day that the RRR cut was announced, the central bank launched a 150 billion yuan MLF operation with an interest rate of 2.85%, unchanged from the previous month. In recent years, the MLF, as a monetary policy tool, has been seen by the industry as a window for whether the central bank will cut interest rates without loosening the monetary root.
The MLF rate was cut by 10 basis points in January this year, and to today's latest quote, which has remained unchanged for three consecutive months. In this regard, Wang Qing, chief macro analyst of Oriental Jincheng, said that due to the further increase in the current downward pressure on the economy, the tax rebates and tax cuts in fiscal policy and the comprehensive reduction in monetary policy are increasing one after another, but the Fed's interest rate hike is about to speed up, and the mainland's monetary policy still strives to take into account both internal and external balances under the tone of "taking me as the mainstay", maintaining a balance between internal and external equilibrium.
"Among them, whether to cut interest rates or not and to what extent it will exacerbate capital outflows and trigger the depreciation of the RMB exchange rate are the main trade-off factors at present." In addition, the duration and impact of this round of the epidemic remain to be seen, and the urgency of the economic downturn may not be enough to prompt regulators to use interest rate cuts twice in four months. Wang Qing said that the probability of interest rate reduction in the second quarter is still high, which is of great significance for reversing the expectation of the property market, striving to achieve a recovery of the real estate industry in the middle of the year, and stabilizing the macroeconomic market.
Wen Bin said that although the MLF policy interest rate remains unchanged this month, the RRR cut may prompt the LPR quotation line to reduce the spread, and the LPR interest rate is expected to be lowered on the 20th of this month.