Penghua Fund： The RRR cut is intended to reduce the cost of physical financing
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Penghua Fund: The RRR cut is intended to reduce the cost of physical financing
Penghua Fund incident: The People’s Bank of China stated on September 6 that it decided to fully reduce the deposit reserve ratio of financial institutions on September 6, 2019.5 shareholders (excluding finance companies, financial leasing companies and auto finance companies).In addition, in order to promote increased support for small and micro enterprises and private enterprises, an additional reduction of the deposit reserve ratio for urban commercial banks operating only in provincial administrative regions was made on October 15 and NovemberOn the 15th, it was implemented in two places, each time down by 0.5 averages. Interpretation: The People’s Bank of China said that the long-term funds released by the RRR cut will be about 900 billion yuan, of which about 800 billion yuan will be released by the full-scale reduction, and about 100 billion yuan will be released by the targeted reduction.The RRR cut is in line with the September 4th National Assembly’s “timely use of policy tools such as universal and targeted RRR cuts.”.The spirit of increasing financial support for the real economy, especially small and micro enterprises.Under the background of increasing downward pressure on the economy and sluggish physical financing needs, the release of funds to reduce the bank’s debt can effectively alleviate the pressure on the bank’s debt end. The bank’s targeted reduction in bank structure will support urban commercial banks and private small and micro enterprises. The combination of scale and structural policies will help reduce the physicalFinancing costs. The RRR cut still reflects the characteristics of structural easing, not “flooding in floods”, but the hedge against the tax period in mid-September to gradually or reduce open market operations to maintain reasonable liquidity; anotherOn the other hand, the recent tightening of financing policies for real estate companies, as well as the extension of a clear statement that mortgage interest rates will not be downgraded, will subsequently or mainly promote the flow of funds to entities and support private small and micro enterprises.In addition, the issuance of special bonds will initially increase the excess reserve requirements of commercial banks. This reduction will also help proactive fiscal policies and jointly support the real economy. From a follow-up point of view, the policy and mechanism of currency policy will be further gradually promoted to promote the conversion of wide currency to wide credit.On August 17, in order to deepen the reform of interest rate marketization, improve the efficiency of interest rates, and promote the reduction of the financing cost of the real economy, it was decided to reform and improve the formation of the loan market quoted interest rate (LPR) formation mechanism. The new LPR quoted mechanism is “Mid-Term Lending Facility (MLF)”; On August 20th, the National Interbank Funding Center issued the first quotation since the reform of the LPR mechanism.25BP, compared with 4 before the reform.31% cut 6BP, 10BP lower than the benchmark; 5-year LPR reported 4.85%, 5BP 杭州风月网 lower than the benchmark; overall, the slight reduction of the “first show” of LPR basically accords with market expectations, while at the same time leaving room and possibility for the subsequent downward adjustment of LPR through the reduction of policy interest rates;Against the backdrop of increasing downward pressure on the domestic economy, there will continue to be policy rate cuts such as MLF reductions to guide further declines in LPR and reduce physical financing costs.