CICC: The RRR cut before the Spring Festival is in line with expectations that there is still room for a reduction in 2020
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China Securities Journal (Reporter Zhou Lulu) On January 1, 2020, the People’s Bank of China announced on its official website that it would reduce the deposit reserve ratio of financial institutions by 0 on January 6, 2020.
5 shareholders (excluding finance companies, financial leasing companies and auto finance companies).
In response, CICC’s macro team published a research report saying that considering the cross-liquidity gap before the Spring Festival and the issue of local bonds from January require appropriate funding support, the RRR cut before the Spring Festival is in line with expectations; looking forward to 2020, there is still room for RRR cuts.And, in January 2020, the LPR price estimate is slightly reduced.
CICC said that the market already has certain expectations for the recent reduction in standards.
Before the Spring Festival holiday, usually face a liquidity gap of more than US $ 1 trillion (and earlier this year), and the issuance of large-scale local bonds will start on January 2nd, and the issuance arrangement may still accompany the “high-low and high-low” in 2019.Trends, the banking system is facing breakthrough liquidity pressure in early 2020, and continuous liquidity hedging is required.
Looking forward to 2020, CICC said that in order to maintain reasonable and easy liquidity, especially considering the policy needs of hedging small and medium banks’ deleveraging and “non-standard” asset re-tightening effect, there is still room for reduction in 2020.
The return of “non-standard” assets has caused the proportion of bank debts to be paid to increase, reducing the effectiveness of reducing the release of liquidity.
Therefore, in the context of tightening regulations, it may be necessary to reduce the nominal reserve ratio below the “normalized” level in order to offset the tightening pressure on the credit cycle of the “non-standard” return statement and support currency distribution.
CICC also said that, as far as cadence is concerned, if the growth rate of social financing 北京夜网 appears after a recent reduction in the standards or a more obvious stabilizing rebound, the pace of declining standards may be suspended in the short term.
In addition, in order to cope with the issuance of local debt and further promote the decline in financing costs of the real economy, the probability of a slight reduction in LPR quotes in January 2020 is relatively high.