In this way, commercial banks can borrow more money abroad, which is a policy to stimulate the economy.
It is far-fetched to say that it is equivalent to printing money and issuing money, but it also overlaps in actual effect.
RRR cut is one of the central bank's monetary policies. The central bank reduces the statutory deposit reserve ratio, which affects the number of banks' loanable funds, thus increasing the credit scale, increasing the money supply, releasing liquidity and stimulating economic growth.
merits and demerits
superiority
(1) The central bank has the initiative and is less affected by the outside world, which better reflects the policy intention of the central bank.
(2) It has a rapid, powerful and extensive impact on the money supply.
(3) It acts on all banks and deposit-taking financial institutions in a fair and consistent time and degree.
disadvantaged
(1) The effect of the policy is too violent and inflexible, which is greatly influenced by the excess reserve of banks in the banking system and cannot be used frequently.
(2) To increase the instability of bank operation, policies and measures are irreversible to some extent.
"RRR cut" has limited impact on the real estate market. The first is to reduce the deposit reserve ratio, which is super good for bank stocks, while benefiting the stock market and the property market.
Reducing the reserve is only to hedge the risk of a hard landing and can be used for stock trading. If the policy strength exceeds market expectations, the best performance is banking stocks; But for the future economic situation, monetary policy is not omnipotent.
By reducing RRR, the liquidity of the market will be increased at first, and commercial banks will have stronger credit supply capacity. After the reserve is lowered, banks will have relatively more abundant funds, which is conducive to credit supply; Second, the liquidity of funds is relatively loose, which helps to reduce market interest rates. After the deposit reserve ratio is lowered, commercial banks can get about 654.38+0.5 billion yuan. After the cost is reduced, it will also help banks to provide lower financing costs and credit funds in the future. At the same time, it is not ruled out that the next MLF interest rate reduction will affect the traction LPR interest rate reduction to reduce the financing cost of enterprises.
RRR cuts affect industry configuration.
CITIC Jiantou believes that, first, when the second stage of the bull market comes, brokers will form the best industry. In the long run, China's economic development will be directly financed, and the capital market reform will also benefit brokers for a long time. Secondly, with the decline in interest rates and economic transformation, the valuation of long-term growth stocks has increased rapidly, and the superimposed earnings expectations have improved, which is optimistic for a long time. Third, credit is loose, interest rates are falling, and counter-cyclical efforts are increasing. Some cyclical industries with low valuation and difficult reversal (such as chemical industry and automobile) also have good opportunities. Fourth, consumption has also become the main demand for endogenous growth, which is also a direction worthy of long-term persistence. Fifth, after the interest rate falls, the allocation value of the high dividend plate has a new appeal to fixed-income investors.
Song Qinghui, a famous economist, pointed out that the central bank's "comprehensive RRR reduction+targeted RRR reduction" was very strong, releasing nearly one trillion long-term funds, ensuring sufficient and reasonable market liquidity, which had a positive impact on the stock market and the bond market.