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Minsheng Bank: CN Govt Launches Policies to Cut RRR, Interest Rates With Strength Beyond Mkt Expectations
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Wen Bin, chief economist at China Minsheng Bank, wrote that the People's Bank of China (PBOC) Governor Pan Gongsheng announced a package of incremental policies with strength exceeding market expectations to ease currency, support the property market, and stabilize the economy at the press conference held by the State Council Information Office on financial support for high-quality economic development. Among them, the central bank lowered the required reserve ratios by 0.5 ppts, providing long-term liquidity of RMB1 trillion. Depending on market liquidity conditions, it may further reduce the ratios by 0.25-0.5 ppts within the year, potentially releasing up to RMB2 trillion in liquidity and dropping banks' liability costs by about RMB8 billion. In terms of real estate stabilization policies, the average reduction in outstanding mortgage rates is about 0.5 ppts, bringing them close to the levels of new mortgage rates. The central bank also announced the creation of new policy tools, namely the "Securities, Funds, and Insurance Companies Swap Facility" and the "Specialized Re-lending for Share Buybacks and Increase in Holdings", providing convenient conditions and supportive guidance for capital inflows into the stock market. AAStocks Financial News |
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