Is the RRR cut related to the loan interest rate?
In fact, the RRR cut is not directly related to the loan interest rate, but it will have a certain impact on the loan interest rate. Because after RRR cuts, major banks can use their funds more flexibly. As a financial institution, the bank's loan interest rate is one of the main sources of its profits. There are more flexible funds, which means that banks also have more funds to lend.
After the loan funds are sufficient, the bank's loan interest rate may fall or rise. The specific situation still depends on the loan situation of major banks. In principle, which part of the KPI of the bank has not been completed, which area of funds will be given priority. For example, if the credit card performance of the bank is not completed, it is possible to give priority to the loan funds in the credit card business.
Will the loan interest rate drop after RRR cuts?
Not necessarily, but also according to the funds that banks can flexibly use at present and the LPR interest rate. However, generally speaking, after the central bank reduces RRR, the loan interest rate of most banks will drop a little.
However, it should be noted that if the borrower applies for a mortgage loan, the loan interest rate will not drop in a high probability. Banks prefer to put flexible funds in short-term loan products. Loans such as mortgage loans will be strictly controlled, and loan interest rates and loan quotas will also need to be reviewed.
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