On April 15, the Chinese peoplebankDecision to downgrade financial institutions on April 25, 2022deposit reserverate 0.25 percentage points (excluding 5% that have been implementeddeposit reserve ratiofinancial institutions). In order to increase support for small and micro enterprises and “agriculture, rural areas and farmers”, for urban commercial banks that do not operate across provinces and rural commercial banks with a deposit reserve ratio higher than 5%, the deposit reserve ratio is lowered by 0.25 percentage points. An additional 0.25 percentage point drop. After this reduction, the weighted average deposit reserve ratio of financial institutions was 8.1%.
This RRR cut highlights the timeliness of policy implementation.Before this RRR cut, the State Council executive meeting on April 13 pointed out that the RRR cut should be used in a timely manner.currencyPolicy tools to further increase financial support for the real economy, especially industries seriously affected by the epidemic, small, medium and micro enterprises, and individual industrial and commercial households, make reasonable profits to the real economy, and reduce comprehensive financing costs. According to previous years, it took 2-19 days for the RRR cut to be officially implemented, but this time the RRR cut is only 2 days away from the regular meeting on the 13th, which highlights the timeliness of policy implementation.
In addition, at the executive meeting of the State Council on March 29, the Prime Minister also emphasized that policies to stabilize the economy should be implemented sooner rather than later, rather than measures that are not conducive to stabilizing market expectations.
“Stability in the first place, seeking progress while maintaining stability” is still the main tone of monetary policy. China has always maintained a prudent monetary policy and has not engaged in flooding. Even in the context of overseas “big water release” since the epidemic, China has always maintained a “flexible, precise, reasonable and appropriate” strategy.Therefore, the current overseas inflation is high, and we have to respond by raising interest rates and shrinking the balance sheet.Qualcommwhen inflated. The domestic inflationary pressure is relatively small, and the basic conditions for reducing the reserve ratio are met.
The RRR cut will release 530 billion yuan of long-term funds, which will support small and medium-sized enterprises more than the stock market. According to the introduction of the central bank, this RRR cut has released a total of about 530 billion yuan of long-term funds. On the one hand, the purpose is to optimize the capital structure of financial institutions and increase the long-term stable funding sources of financial institutions. This reduction in the RRR reduces the capital cost of financial institutions by about 6.5 billion yuan per year; Small, medium and micro enterprises that have been greatly affected by the epidemic. On the whole, the RRR cut funds are more prepared for the flow of real enterprises, and the boosting effect on the stock market is expected to be relatively limited.
Focus on the direction of “steady growth”. This RRR cut once again strengthens support for small and medium-sized enterprises from the perspective of financing, and the “RRR cut” is also an important part of achieving stable growth. As can be seen from the March government work report, “stabilizing growth” is the focus of this year’s policy, and this year’s monetary policy and fiscal policy will work together to boost the national economy.The related industries are expected to benefit, and it is recommended to pay attention to: first, the real estate and infrastructure industry chains. The pressure on the upstream and downstream industry chains of real estate under “steady growth” is expected to ease, and the industry is expected to usher in valuation repairs, and increased investment in infrastructure will benefit the industry. The improvement of profits; the second isbankIn the sector, the reduction in the deposit reserve helps to increase thebankThe ability to allocate funds will further release profits; the third is upstream raw material enterprises. The development of infrastructure is expected to support the demand for upstream raw materials, and industry profits are expected to remain high.
Risk warning: Policy is less than expected; overseas risk disturbance.
(Article source: Chuan Caisecurities）