Is there still room for interest rate and reserve requirement cuts? Central Bank Responds to Liquidity | Banks | Central Bank
The National Development and Reform Commission, Ministry of Finance, People's Bank of China, and State Administration of Taxation jointly held a press conference to introduce the situation of "playing a good combination of macroeconomic policies and promoting high-quality economic development". Is there still room for interest rate and reserve requirement cuts? Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, stated that on the one hand, reserve requirement reduction, open market operations, medium-term lending convenience, and various structural monetary policy tools all have a total effect on liquidity injection. It is necessary to coordinate and flexibly use them to jointly maintain the reasonable and sufficient liquidity of the banking system. The goal is to comprehensively evaluate the reserve requirement ratio policy and maintain the reasonable and sufficient liquidity of the banking system.
On the other hand, it is necessary to scientifically and reasonably grasp the level of interest rates. Based on the economic and financial situation and macroeconomic regulation needs, timely and moderately carry out countercyclical adjustment, while also taking into account the balance between growth and risk, internal and external factors, preventing fund arbitrage and idle, improving policy efficiency, and enhancing the stability of bank operations.
Zou Lan stated that in recent years, there has been a significant decrease in corporate loan interest rates, and in the future, we will continue to play a good role in the reform of loan market quotation interest rates and guide banks to adjust the interest rates of existing personal housing loans in an orderly manner in accordance with the law. At the same time, we must continue to play an important role in the market-oriented adjustment mechanism of deposit interest rates, maintain market competition order, support banks in reasonably controlling debt costs, and enhance the ability of finance to continuously support the real economy.