Chief Economist of CITIC Securities: This reserve requirement ratio cut may not be the last overall quantitative easing measure in this monetary easing cycle

According to Jin10's report, Mingming, the chief economist of CITIC Securities, stated that the timing and scale of this reserve requirement ratio cut exceeded market expectations and reflected the clear support of the People's Bank of China for the goal of repairing the real economy. In January, against the backdrop of a seasonal increase in cash demand, there was a significant liquidity gap and a slight rise in funding rates near month-end. After this reserve requirement ratio cut is implemented, it is expected that the liquidity environment will further improve. It is worth noting that this reserve requirement ratio cut was announced simultaneously with reductions in re-lending and rediscount rates. Although there have been operations involving both reserve requirement cuts and targeted reserve requirement cuts in history, it is rare to see a combination of reserve requirement cuts and targeted interest rate cuts, highlighting the precise effectiveness of monetary policy. Under the guidance of "strengthening countercyclical adjustments across cycles," this reserve requirement ratio cut may not be the last comprehensive operation in this round of loose monetary policy cycle.