Major benefits!
The second comprehensive reserve requirement ratio cut within the year was officially launched today
1 November 25, People's Bank of China announced that decided to reduce the deposit reserve ratio of financial institutions by 20.25 percentage points (excluding financial institutions that have implemented a 5% deposit reserve ratio). This reduction in reserve requirement ratio has released a total of about 500 billion yuan in long-term funds .
People's Bank of China Relevant person in charge previously stated that the purpose of this reduction in the reserve requirement ratio is:
First, maintain a reasonable level of liquidity, maintain a reasonable growth in the total amount of monetary and credit, implement a package of policies and measures to stabilize the economy, increase support for the real economy, and support the effective improvement of economic quality and reasonable growth of quantity.
The second is to optimize the fund structure of financial institutions, increase the long-term stable fund source of financial institutions, enhance the fund allocation capabilities of financial institutions, and support industries and small and medium-sized enterprises seriously affected by the epidemic.
Third, this reduction in the reserve requirement ratio reduces the capital costs of financial institutions by about 5.6 billion yuan per year. It can promote the reduction of the comprehensive financing costs of the real economy through transmission through financial institutions.
Researcher Liang Si at the China Banking Institute believes that the funds released by the reserve requirement ratio cut have no cost and maturity period, which provides financial institutions with a long-term and cost-free source of funds, helps to improve the credit supply capabilities of financial institutions and provide sufficient medium- and long-term credit support for enterprises.
Considering that this reduction in the reserve requirement ratio releases about 500 billion yuan, industry experts said that with the help of the reduction in the reserve requirement ratio releases large amounts of medium and long-term funds, liquidity is expected to remain reasonably abundant, and the capital market will achieve a stable New Year's Eve. Wen Bin, chief economist at Minsheng Bank, said that while protecting market liquidity, the implementation of the reserve requirement ratio cut will help improve the credit supply capabilities of financial institutions and better meet the medium- and long-term credit needs of enterprises. At the same time, the reduction of the reserve requirement ratio reduces the annual capital costs of financial institutions by about 5.6 billion yuan, which can expand the space for it to continue to reduce the financing costs of the real economy.
