Open-source Securities Chief Macro Economist He Ning: There is still room this year for timely reserve requirement ratio cuts and interest rate reductions

On March 6th, He Ning, Chief Macro Economist at Kaiyuan Securities, provided an interpretation of the government work report. He stated that the monetary policy will continue to be “moderately easing,” with room for timely reserve requirement ratio (RRR) cuts and interest rate reductions, supporting domestic demand, technology, and small and medium-sized enterprises. The government work report pointed out to “flexibly and efficiently use various policy tools such as RRR cuts and interest rate reductions,” and to promote the overall social financing cost to be “operating at a low level.” From the wording, the necessity and urgency of monetary easing have somewhat diminished, but efforts are still needed when necessary. When appropriate, RRR cuts and interest rate reductions may be implemented in a timely manner, with an expected RRR cut of 50–100 basis points and a 10 basis point interest rate reduction. The government work report also mentioned “optimizing and innovating structural monetary policy tools, appropriately increasing their scale, and improving implementation methods,” with an expected increase in support for structural monetary policies, including expanding domestic demand, technology, and small and micro enterprises. (People’s Financial News)