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at 9 a.m. on tuesday, september 24, the state council information office held a press conference. pan gongsheng, governor of the people's bank of china, li yunze, director of the state financial supervision and administration, and wu qing, chairman of the china securities regulatory commission, introduced the relevant situation of financial support for high-quality economic development and answered questions from reporters.

pan gongsheng, governor of the people's bank of china

pan gongsheng, governor of the people's bank of china, said at the meeting that the people's bank of china will firmly adhere to a supportive monetary policy stance, increase the intensity of monetary policy regulation, and improve the precision of monetary policy regulation.

pan gongsheng announced the following policies at the meeting: first, reduce the deposit reserve ratio and policy interest rate, and drive the market benchmark interest rate down; second, reduce the interest rate of existing mortgage loans and unify the minimum down payment ratio of mortgage loans. third, create new policy tools to support the development of the stock market.

lower the reserve requirement ratio, lower interest rates, and lower the interest rates on existing mortgage loans

reduce the deposit reserve ratio and policy interest rate.the deposit reserve ratio was lowered by 0.5 percentage points, providing about 1 trillion yuan of long-term liquidity to the financial market.the reserve requirement ratio may be further reduced by 0.25-0.5 percentage points before the end of the year. the central bank's policy interest rate will be lowered, and the 7-day reverse repurchase operation rate will be reduced by 0.2 percentage points from the current 1.7% to 1.5%, guiding the loan market quotation rate and deposit rate to decline simultaneously and maintaining the stability of the net interest margin of commercial banks.

reduce the interest rates on existing mortgages and unify the minimum down payment ratio for mortgages.guide commercial banks to reduce the interest rates of existing mortgage loans to near the interest rates of newly issued mortgage loans, with an average reduction of about 0.5 percentage points. unify the minimum down payment ratios for first and second mortgage loans, and reduce the minimum down payment ratio for second mortgage loans at the national level from 25% to 15%. increase the central bank's funding support ratio for the 300 billion yuan affordable housing refinancing created by the people's bank of china in may from 60% to 100%, and extend the two policy documents, commercial property loans and "16 financial measures" that are due before the end of the year, to the end of 2026.

create new policy tools to support stock market development

pan gongsheng said that the central bank will create new policy tools to support the development of the stock market. it will create a facility for securities, funds and insurance companies to swap, support qualified securities, funds and insurance companies to obtain liquidity from the central bank through asset pledge, and significantly enhance the ability to obtain funds and increase stock holdings. it will create special re-loans to guide banks to provide loans to listed companies and major shareholders to support the repurchase and increase of stock holdings.

after the existing mortgage interest rate is reduced by 50 basis points, a 1 million mortgage will pay 100,000 less interest in 30 years

pan gongsheng predicts thatthis rate cut will lead to a 0.3 percentage point reduction in mlf, and it is expected that lpr and deposit rates will also fall by 0.2-0.25 percentage points., and remains neutral on the bank's net interest margin overall.

in response to reporters' questions, pan gongsheng said that the expected average reduction in the stock mortgage interest rate is 0.5 percentage points, which is expected to benefit 50 million households and 150 million people, and reduce household interest expenses by about 150 billion yuan per year on average. for the adjustment of mortgage interest rates, banks need a certain amount of time to make technical preparations, and will subsequently improve the mortgage loan mechanism of commercial banks. banks and customers will make dynamic adjustments based on market principles and autonomous consultation.

the difference in domestic and foreign monetary policy cycles has narrowed, and the external pressure on the rmb exchange rate has significantly decreased.

regarding the exchange rate, pan gongsheng said that the exchange rate is influenced by multiple factors. from the perspective of external factors, due to the divergence of economic trends, geopolitical changes such as the us election, the uncertainty of the external environment and the trend of the us dollar still exists. from the perspective of china's domestic situation, the rmb exchange rate still has a stable and solid foundation; at the macro level, the economic stabilization and improvement will further consolidate growth. the relatively strong monetary policy introduced by the people's bank of china this time will help support the economy and promote consumption and investment.

pan gongsheng further pointed out that the monetary policies of major economies have been adjusted recently, and the pressure on the depreciation of the rmb exchange rate has been significantly relieved. the 50 basis point interest rate cut by the federal reserve is the first interest rate cut after the interest rate hike cycle in the past few years. the monetary policies of major economies have entered a cycle of interest rate cuts, and the momentum of the appreciation of the us dollar has weakened. as the difference in domestic and foreign monetary policy cycles converges, the external pressure on the basic stability of the rmb exchange rate has been significantly reduced.

on the downward trend of government bond yields: the central bank respects the role of the market but needs to observe and assess market risks from the perspective of macro-prudential managementrisk

pan gongsheng said that the recent downward trend in treasury bond yields was due to the downward trend in policy interest rates leading to a downward trend in market interest rates, the slow issuance of government bonds in the previous period, and the weak risk awareness of small and medium-sized financial institutions, which fueled the trend and the herd effect.

the yield level of government bonds is the result of marketization. the people's bank of china respects the role of the market and has created a good monetary environment for the implementation of a proactive fiscal policy. however, we should also see that interest rate risk is an important part of risk management for financial institutions. the risk event of the bankruptcy of silicon valley bank in the united states tells us that the central bank needs to observe and assess market risks from the perspective of macro-prudential management and take appropriate measures to weaken and hinder the accumulation of risks. this is the responsibility of the central bank.

pan gongsheng: the establishment of a stabilization fund is under study

pan gongsheng said that the people's bank of china created structural monetary policy tools for the first time to support the capital market. one of them is the securities, funds, and insurance companies swap facility, which supports eligible securities, funds, and insurance companies to use their own bonds, stock etfs, and csi 300 constituent stocks as collateral to exchange for high-liquidity assets such as treasury bonds and central bank bills from the central bank. this policy will greatly increase the funds obtained by relevant institutions and increase their stock holdings. the funds obtained by institutions through this tool can only be used to invest in the stock market.

pan gongsheng revealed that the scale of the first phase of the swap facility operation is 500 billion yuan, and the scale can be expanded in the future depending on the situation. "i told chairman wu qing (of the china securities regulatory commission) that as long as this matter is done well, we can increase it by another 500 billion yuan, or a third 500 billion yuan in the future. we are open to it."

when talking about the establishment of a stabilization fund, pan gongsheng, governor of the people's bank of china, said in response to a question from securities times that it was under study.