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the people's bank of china has decided to lower the rrr by 0.5 percentage points starting from september 27.

the people's bank of china announced on september 27 that it has decided to lower the deposit reserve ratio of financial institutions by 0.5 percentage points starting from september 27, 2024 (excluding financial institutions that have implemented a 5% deposit reserve ratio). after this reduction, the weighted average deposit reserve ratio of financial institutions will be approximately 6.6%.

the people's bank of china stated that it will adhere to a supportive monetary policy stance, increase the intensity of monetary policy control, improve the accuracy of monetary policy control, and create a good monetary and financial environment for china's stable economic growth and high-quality development.

cutting the policy interest rate by 20 basis points has been implemented!

the people's bank of china issued an announcement on september 27 that in order to increase the counter-cyclical adjustment of monetary policy and support stable economic growth, starting from september 27, the open market 7-day reverse repurchase operation interest rate will be adjusted from the previous 1.70% to 1.50%, down 20 basis points from the previous time.

in addition, the announcement shows that the interest rates for the 14-day reverse repurchase and temporary forward and reverse repurchase operations in the open market will continue to be determined by adding or subtracting points to the 7-day reverse repurchase operating interest rate in the open market, and the range of additions and subtractions will remain unchanged.

zou lan, director of the monetary policy department of the people's bank of china, said that the central bank has made it clear that the 7-day reverse repurchase operation interest rate is the main policy interest rate, and has changed the 7-day reverse repo operation from the original interest rate bidding to a fixed interest rate and quantity bidding. the bidding needs of primary dealers are fully met. the interest rate is no longer the result of winning the bid, but is determined by the central bank based on the needs of implementing monetary policy. the quantity is no longer a means for the central bank to adjust liquidity, but is determined by primary dealers based on the needs of the central bank. the policy interest rate is determined jointly with their market judgment, which is conducive to improving the initiative of institutional liquidity management.

the central bank stated its stance: make every effort to accelerate the implementation of incremental financial policy measures

on the afternoon of september 26, the people's bank of china held a system-wide video conference to study and implement the spirit of the political bureau meeting of the central committee of the communist party of china on september 26, and to make every effort to accelerate the implementation of recent financial incremental policy measures and achieve results. pan gongsheng, secretary of the party committee and president of the people's bank of china, attended the meeting and delivered a speech.

the meeting emphasized that the politburo meeting made an in-depth analysis of the current economic situation and made clear arrangements for the next economic work. the people's bank of china system must act quickly, go all out, and fully implement it. it is necessary to speed up the issuance of financial incremental policy and measure documents and implement each policy measure one by one. it is necessary to strengthen departmental coordination, set up special work teams, and work together across the system to effectively promote continued economic recovery and high-quality financial development.

this policy rate cut is the largest in the past four years

"this policy rate reduction is the largest in the past four years. it is an important manifestation of supportive monetary policy and will reduce social comprehensive financing costs through transmission." dong ximiao, chief researcher of china merchants union, said that this 20 basis point reduction in policy interest rates reflects the "strong" requirements, under the market-oriented interest rate control mechanism, will drive down various market benchmark interest rates. previously, pan gongsheng, governor of the people's bank of china, announced at a press conference on september 24 that interest rates would be cut in the near future, and the winning rate for the mlf operation carried out on september 25 was subsequently reduced by 30 basis points. it is expected that this reduction in policy interest rates will also lead to a simultaneous decline in deposit rates and loan prime rates (lpr), maintaining the stability of commercial banks' net interest margins. at the same time, interest rate cuts will help reduce the comprehensive financing costs of the real economy and support stable economic growth.

dong ximiao believes that the central bank's sharp interest rate cut will continue to boost market confidence. with the support of a series of recent incremental policies, market expectations have improved significantly. the people's bank of china issued an announcement at 8 o'clock this morning announcing an interest rate cut, which will help maintain the sustainability of policy intensity, further build consensus on high-quality development, and consolidate the continued stability of the capital market. a good foundation will provide sufficient impetus for the healthy and upward development of the market.

source: xinhua news agency, people's daily