The RRR cut was carried out by 0.5 percentage points on September 16, in two forms: a comprehensive RRR cut and a targeted RRR cut, releasing 900 billion yuan in long-term funds

The "boot" of the RRR cut was implemented as scheduled, and The central bank implemented two forms of comprehensive RRR cuts and targeted RRR cuts at once. The last time this "combination punch" occurred was in October 2015.

The central bank announced on September 6 that it will lower the deposit reserve ratio of financial institutions by 0.5 percentage points across the board on September 16 (excluding finance companies, financial leasing companies and auto finance companies). In addition, an additional targeted reduction of 1 percentage point in the deposit reserve ratio for urban commercial banks operating only within provincial administrative regions will be implemented in two installments on October 15 and November 15, with each reduction of 0.5 percentage points.

The relevant person in charge of the central bank stated that the statutory reserve ratio of finance companies, financial leasing companies and automobile finance companies is 6%, which is the lowest among financial institutions and is already at a low level. Therefore, this comprehensive reduction These three types of financial institutions are not included.

This RRR cut will release about 900 billion yuan of long-term funds, of which a comprehensive RRR cut will release about 800 billion yuan and a targeted RRR cut will release about 100 billion yuan. Since the beginning of this year, the central bank has implemented two rounds of RRR cuts. Due to the downward pressure on the economy, there are some calls for monetary easing in the market. However, the relevant person in charge of the central bank made it clear on the 6th that this RRR cut will be offset by the tax holiday in mid-September. The total liquidity of the banking system will remain basically stable, and The targeted RRR cut will be implemented in two phases, which is also conducive to the steady and orderly release of funds. Therefore, this RRR cut is not a flood, and the orientation of prudent monetary policy has not changed.

Why is "comprehensive RRR reduction + targeted RRR reduction" adopted this time?

The "combination punch" approach of this RRR reduction was discussed at the State Council executive meeting on September 4. There have been "hints". In the statement of monetary policy, the State Council executive meeting emphasized the timely use of tools such as general and targeted RRR cuts.

The relevant person in charge of the central bank explained that this RRR cut will release about 900 billion yuan of funds, effectively increasing the source of funds for financial institutions to support the real economy, and also reducing bank capital costs by about 15 billion yuan per year, which is transmitted through banks The actual interest rate on the loan can be reduced. The targeted RRR reduction is an important measure to improve the policy framework of “three tiers and two premiums” that implements lower deposit reserve ratios for small and medium-sized banks. It will help promote urban commercial banks serving the grassroots to increase their support for small, micro and private enterprises. These are all conducive to supporting the development of the real economy.

Lian Ping, chief economist of the Bank of Communications, told the Beijing News reporter that this time the form of comprehensive RRR cut plus targeted RRR cut is to first solve the urgent needs of the banking system, and secondly to ensure the safety of the banking system. Targetedly reduce the deposit reserves of some small and medium-sized banks, because small and medium-sized banks may have more difficulties in terms of liabilities.

In this regard, Color, the chief economist of Founder Securities, analyzed that the central bank's implementation of the policy of "comprehensive RRR reduction + targeted RRR reduction" this time is a fine-tuning of the previous monetary policy. The idea of ????the early monetary policy is that if countercyclical adjustments are to be carried out, it mainly relies on open market operations, namely MLF and targeted reserve requirement ratio cuts. The comprehensive RRR cut implemented this time is a more loose monetary policy and a hedging measure against the downward pressure on the economy.

How will the stock market and property market go?

After the State Council executive meeting on September 4th revealed the signal of lowering the required reserve ratio, A-shares opened higher on September 5th, and the Shanghai Composite Index once exceeded 3,000 that day. point, the last time it reached this threshold was in late June. As of the close on the 6th, the Shanghai Stock Index has been positive for five consecutive years since September. From a historical perspective, after the comprehensive RRR cut in January this year, the Shanghai Stock Exchange Index started to rise, rising from a low of 2,440 points to a maximum of 3,288 points. However, there have been cases where the stock market fell after RRR cuts.

Jiang Han, a special researcher at Suning Financial Research Institute, believes that the RRR cut will further benefit the Chinese stock market. China's stock market has been doing well recently. Under such circumstances, the further enhancement of market liquidity after the central bank's RRR cut will inevitably allow listed companies to receive more financial support, especially private companies among them. With more help, there will undoubtedly be better performance to show to the market. In the long run, the RRR cut will help the further development of the Chinese stock market.

Yang Delong, chief economist of Qianhai Kaiyuan Fund, said that investors have higher expectations for the introduction of countercyclical policies, the market's risk appetite has further increased, and the "Golden Nine and Silver Ten" market will surely become stronger.

For the property market, after experiencing a period of "Little Indian Spring" in the first half of the year, policies have continued to be strict in recent months. In particular, the Political Bureau meeting of the Central Committee of the Communist Party of China held on July 30 released a clear signal that my country will adhere to real estate regulation and control and will not use real estate as a short-term means of stimulating the economy.

Yuan Chengjian, vice president of Zhuge Zhaofang, said that this RRR cut is not a flood, and the prudent monetary policy orientation has not changed. The RRR cut is not targeted at the real estate market, and real estate controls will show no signs of relaxing in the short term.

Yan Yuejin, research director of the Think Tank Center of E-House Research Institute, analyzed that the increase in mortgage interest rates is smaller than expected. He said that a new LPR loan pricing mechanism will be implemented in October, so the base point may be raised in some cities, but relatively speaking, banks are more willing to actively lend.