Zheshang Securities(SH:601878) Mei Ri Jing Ji Xin Wen·2025-05-07 11:54Core Viewpoint - The People's Bank of China (PBOC) has announced a reduction in reserve requirements and interest rates, along with new policy tools to support technological innovation, expand consumption, and promote inclusive finance [1][2]. Monetary Policy - The total easing policy aims to counter external shocks through the reduction of reserve requirements and interest rates, shifting the central bank's primary focus from international balance and financial stability to stabilizing growth and promoting reasonable price recovery [2][4]. - The PBOC is expected to maintain a supportive monetary policy stance, adjusting it according to internal and external conditions, with an anticipated 50 basis points (BP) reduction in reserve requirements and 20 BP in interest rates throughout the year [4]. Economic Outlook - Despite a stabilization in the economy during the first quarter, the effective demand remains insufficient, and a slight decline in economic activity is expected in the second quarter [2][3]. - The upcoming peak in government bond supply may increase pressure, necessitating the PBOC's intervention to alleviate liquidity tightness caused by concentrated government bond issuance [3][4]. Structural Policies - The new structural monetary policies will focus on financial support for the real economy, including a reduction in the interest rates of various structural policy tools by 0.25 percentage points [6][7]. - A significant increase in the quota for technological innovation and technical transformation re-loans from 5 trillion yuan to 8 trillion yuan is aimed at meeting the financing needs of technology-driven enterprises [6][7]. Consumption and Employment - The establishment of re-loans for service consumption and elderly care is intended to guide commercial banks in increasing credit support for these sectors, thereby promoting consumption and stabilizing employment and income expectations [7]. - The focus on stabilizing asset prices in the real estate, stock, and foreign exchange markets is crucial for activating domestic economic vitality and addressing internal risks [7].