Many investors pay more attention to the news of investment and financial management, but they don't know much about the central bank's RRR cut of 25 basis points. So what does this mean? What is the impact of the RRR cut by the central bank on the financial management of ordinary people? We have prepared relevant contents for your reference.

What does it mean for the central bank to cut RRR by 25 basis points?

When used for interest rate changes, 1 basis point is 0.0 1%, so 25 basis points are 0.25%. Therefore, the RRR cut by the central bank by 25 basis points means that the People's Bank of China has decided to cut the deposit reserve ratio of financial institutions by 0.25 percentage points.

Take the latest RRR reduction from 65438 to February 5, 2022 as an example: The People's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on February 5, 2022. After this reduction, the weighted average deposit reserve ratio of financial institutions is about 7.8%, and the long-term funds are about 500 billion yuan.

What is the impact of the RRR cut by the central bank on the financial management of ordinary people?

When the central bank reduces the RRR, that is, the statutory deposit reserve, it means that the deposit reserve paid by commercial banks to the central bank decreases, the funds used for loans increase, and it also means that the currency circulating in society increases, which will stimulate consumption to a certain extent, so the wealth management income will decline.

There are many wealth management products. For some equity fund financing and bank financing, if some funds flow into the stock market after RRR cuts, it may push up the stock price, then stock investors may get good returns.

The decline in wealth management income will generally have an impact on some depositors and investors who manage money in banks, and the yield may decline. However, if investors have no financial management or have time deposits before, then it will not have an impact.

However, it should be noted that it may push the stock price up. It depends. If the stock itself is not in good condition, there will be risks and the possibility of falling. In addition, the risk of stocks is also great. If you are an inexperienced novice, it is not recommended to buy stocks.

Stock trading needs to know something about stocks in order to reduce the possibility of losses. There are still a few people who make money in stock trading, so everyone must be cautious in stock trading. The impact of news is generally short-lived, and the fundamentals and technical aspects should also be analyzed.