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Will the central bank cut interest rates when reducing RRR?
After RRR cuts, interest rates may not necessarily be lowered. 1October 7th, 10, the central bank announced that the RRR was lowered by 1%, which far exceeded expectations (it was basically 0.5% before) and released 750 billion incremental funds.

However, first of all, whether to cut interest rates is decided by the People's Bank of China; Interest rate reduction generally refers to lowering the benchmark interest rate of loans or deposits; RRR cut interest rates this time to reduce the deposit reserve ratio of the Bank of China, and the deposit reserve ratio paid by the Bank of China to the Central Bank also decreased. At this time, the amount used for lending will increase, which is equivalent to releasing liquidity.

Secondly, interest rate cuts are beneficial to borrowers who apply for loans. After the interest rate cut, the loan interest rate in the loan contract will be recalculated, and the monthly repayment amount of the borrower will be reduced. However, when to make adjustments depends on how the contract stipulates. After the interest rate cut, the borrower can call the bank for consultation. Cutting interest rates means that banks use interest rate adjustment to change cash flow. When the bank cuts interest rates, the income from depositing funds in the bank decreases, so the interest rate cut will lead to the outflow of funds from the bank, and the deposit will become investment or consumption, resulting in an increase in the liquidity of funds. Generally speaking, cutting interest rates will bring more funds to the stock market, which is conducive to the rise of stock prices.

Third, RRR and interest rate reduction are both adjustments made by the central bank according to the economic development, but ordinary people can't predict when to make adjustments, and the two different policies will eventually play different roles. In normal times, you can pay more attention to the announcement of the People's Bank of China, so that you can know when to reduce RRR or cut interest rates.

Fourthly, for China, the independence of monetary policy can be understood as whether China has the ability to actively raise interest rates (cut interest rates) and reduce RRR (improve RRR), and whether it is interfered by the external environment; The stability of exchange rate is whether the RMB is stable or fluctuates greatly; The free flow of capital is relative to capital control. Take China and Hongkong as examples. Under the linked exchange rate system, that is, the Hong Kong dollar is pegged to the US dollar, the exchange rate of the US dollar against the Hong Kong dollar has always remained at 65,438+0: 7.80. At the same time, Hong Kong is the world's financial center, and its finance is very open to the outside world, that is, Hong Kong has chosen the free flow of capital and the stability of exchange rate at the same time. Under the ternary paradox, Hong Kong has lost the independence of monetary policy, so when the Federal Reserve raises or lowers interest rates, Hong Kong often has to passively follow.

5. The same is true in Chinese mainland now. After RRR cut interest rates on June 7, the head of the central bank said: RMB will not form depreciation pressure. At the same time, it also stressed that "necessary measures will continue to be taken to stabilize market expectations and maintain the smooth operation of the foreign exchange market". In other words, China chose exchange rate stability. At the same time, in the case of continuous interest rate hikes by the Federal Reserve, the Bank of China not only failed to follow suit, but also announced the RRR cut, namely the independence of China's monetary policy choice and the "decoupling" between China and the United States.