the central bank responded to the room for lowering the reserve requirement ratio and interest rates: there is still room for lowering the reserve requirement ratio, and further downward movement of deposit and loan interest rates faces certain constraints
2024-09-08
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zou lan, director of the monetary policy department of the people's bank of china, said at a press conference on the theme of "promoting high-quality development" held by the state council information office on september 5 that policy adjustments such as lowering the reserve requirement ratio and interest rates still require observation of economic trends.
he said that the statutory deposit reserve ratio is a tool for long-term liquidity supply. in comparison, the 7-day reverse repo and medium-term lending facility are tools for corresponding short-term and medium-term liquidity fluctuations. this year, the central bank has added treasury bond trading tools, and the goal of using these tools in combination is to maintain a reasonable abundance of liquidity in the banking system. the policy effect of lowering the reserve ratio at the beginning of the year is still continuing to show. at present, the average statutory deposit reserve ratio of financial institutions is about 7%, so there is still some room.
in terms of interest rates, zou lan said that the central bank has continued to promote a steady decline in the overall financing cost of the society. since the beginning of this year, the market quotation rates for loans with a term of one year and five years or more have fallen by 0.1 and 0.35 percentage points respectively, driving the average loan interest rate to continue to decline. at the same time, it should be noted that due to the speed of bank deposits diversion to asset management products and the narrowing of bank net interest margins, the further decline in deposit and loan interest rates is still subject to certain constraints.
zou lan said that the people's bank of china will closely observe the policy effects and reasonably grasp the intensity and rhythm of monetary policy regulation based on the economic recovery, the achievement of goals and the specific problems facing the macroeconomic operation.
the paper reporter chen yueshi
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