Now, the RRR cut is just waiting to be implemented. Some market institutions further pointed out that it is not ruled out that this month will usher in a "double reduction" of RRR cut + interest rate cut. However, some institutions believe that the current monetary policy still f

4 is regarded as an important window period for monetary policy to intensify. Now, the RRR cut is just waiting to be implemented. Some market institutions further pointed out that it is not ruled out that this month will usher in a "double reduction" of RRR cut + interest rate cut. However, some institutions believe that the current monetary policy still faces the challenge of balancing internal and external balance, and the possibility of interest rate cuts has declined.

Analysts pointed out that the current "I-centered" pattern of monetary policy has not changed, and whether or not to cut interest rates depends on economic performance. The economic data for the first quarter to be released soon will be quite critical.

The reserve requirement ratio reduction is coming

html There is basically no suspense about the April requirement reduction.

htmlThe State Council executive meeting held on the 13th decided to use monetary policy tools such as reserve requirement ratio cuts in an appropriate manner to further increase financial support for the real economy, especially industries severely affected by the epidemic, small and medium-sized enterprises, and individual industrial and commercial households, and reasonably transfer profits to the real economy. , reduce comprehensive financing costs.

Referring to previous experience, many institutions predict that the new RRR cut will most likely be implemented in April and may be announced as soon as this week.

Source: China International Finance Securities

Will interest rates be cut again?

What the market is concerned about is, in addition to the RRR cut, will there be an interest rate cut?

On the one hand, historically, " double-downgraded to " has occurred, most recently in April 2020.

Specifically, the RRR cut was implemented on October 15, 2008, and 15 days later, the one-year loan benchmark interest rate was lowered; the RRR cut was implemented on December 5, 2008, and 18 days later, the one-year loan benchmark interest rate was lowered; 201 The RRR cut was implemented on September 16, 2020, and 4 days later, the 1-year LPR was lowered; on April 15, 2020, the central bank's RRR cut and interest rate cut were implemented at the same time; the RRR cut was implemented on December 15, 2021, and the interest rate was cut 5 days later. Landed.

On the other hand, it is currently necessary to implement "double reduction".

In the opinion of industry insiders, there have been some unexpected changes in the international and domestic environment recently, and the downward pressure on the economy has further increased. Stabilizing the fundamentals of the economy has become a top priority, and it is even more urgent to intensify macroeconomic policies, including monetary policy, in a timely manner. Theoretically, RRR cuts and interest rate cuts are all in the toolbox, and further applications are possible.

But at the same time, as the economic and policy divergence between China and the United States intensifies, the interest rate spread between China and the United States is inverted, the exchange rate fluctuates, and cross-border capital flows increase. Monetary policy faces the challenge of balancing internal and external balance.

The People's Bank of China previously pointed out that under the open macro-structure, monetary policy remains stable, but it is also necessary to grasp the balance between internal and external equilibrium and coordinate domestic and foreign currency policies. But it is also clear that when there is a conflict between internal balance and external balance, as a large country economy that focuses on domestic demand, it should focus on internal balance while taking into account external balance to find the optimal balance point.

Analysts pointed out that the National Standing Committee’s clear deployment of the RRR cut highlights the main line of policies to stabilize growth and also demonstrates the insistence on “I take the lead” in monetary policy. This helps dispel concerns about the direction of monetary policy, but it does not mean that changes in overseas situations will not have any impact on my country's monetary policy control. After all, the problem of balance exists objectively.

At present, institutions have divided views on further interest rate cuts.

believes that there are many institutions that may cut interest rates, and the main reason is to "stabilize growth." For example, the CITIC Securities research report stated that the RRR cut may be implemented in the short term, and the possibility of a "double reduction" is not ruled out.

Guangdong Securities reported that the current actual interest rate differential between China and the United States still has a certain buffer space, and China's exports and foreign direct investment are still relatively prosperous, which has greatly alleviated the external pressure on monetary policy. In the short term, my country's monetary policy will still adhere to the principle of "focusing on me" to offset the downward pressure on the economy, and there is still room for lowering reserve requirements and interest rates.

Some institutions also believe that the possibility of interest rate cuts has declined, mainly because of "taking into account external balance." For example, the GF Securities research report stated that while the current domestic monetary policy is striving to stabilize growth, it also needs to take into account external balance, and the possibility of continuing to lower MLF and reverse repurchase interest rates has declined.

A recent research report released by Everbright Securities stated that historically, during periods of increasing internal and external balance pressure, the central bank has basically not used policy interest rate tools, and has used quantitative tools to hedge against economic downward pressure.

Taking into account the issues of stabilizing growth and balancing internal and external equilibrium, Caixin Research believes that structural monetary policy may be the dominant factor. The reason is that the downward pressure on the domestic economy has further increased, which determines that monetary policy must continue to maintain a general tone of stability and looseness.

Researchers pointed out that the current "I-centered" pattern of monetary policy has not changed, and whether or not to cut interest rates depends on economic performance.

Some institutions said that considering the pressure on economic growth, it is logically possible to cut interest rates. After all, historically, whether to cut interest rates after a RRR cut depends on the economic fundamentals.

Taken together, "interest rate cut" is still a policy option, and the possibility cannot be ruled out, but the probability is smaller than the RRR cut.

For equity assets , Haitong Securities research report pointed out that the future domestic asset prices will mainly depend on our own policies. "As long as you take the right path, there is nothing to be afraid of."

Editor: Yawenhui