Core Viewpoint - The article discusses the progress and optimization of interest rate marketization in China, emphasizing its importance for economic development and the need for further improvements in the interest rate transmission mechanism [2][3][4]. Group 1: Progress of Interest Rate Marketization - During the "14th Five-Year Plan" period, significant strides have been made in interest rate marketization, establishing a framework where market rates and central bank guidance effectively transmit monetary policy signals to the real economy [3][4]. - Key breakthroughs include the comprehensive smoothing of the interest rate transmission mechanism, optimization of the policy interest rate system, and the formal establishment of a market-driven interest rate system [4][5]. Group 2: Policy Rate and Market Rates - In 2024, the central bank will establish the 7-day reverse repurchase rate as the main policy interest rate, replacing the MLF rate, which enhances the short-term interest rate's guiding role [5]. - The People's Bank of China (PBOC) has guided market interest rates to operate smoothly around the policy rate, with the DR007 rate maintaining synchronization with the 7-day reverse repurchase rate [5][6]. Group 3: Loan and Deposit Market Rates - Financial institutions are encouraged to reference the 7-day reverse repurchase rate for LPR pricing, improving the mortgage pricing mechanism and eliminating the nationwide personal housing loan interest rate floor [5][6]. - The PBOC has established a market-based adjustment mechanism for deposit rates, allowing banks to adjust rates based on the 10-year government bond yield and 1-year LPR [7]. Group 4: Challenges and Recommendations - Despite progress, there is still room for optimization in the interest rate transmission mechanism, particularly in improving the quality of LPR quotes and addressing the mismatch between quoted rates and actual rates offered to customers [10][11]. - The article suggests a shift from quantity-based monetary policy targets to price-based frameworks, enhancing the coordination between monetary policy and fiscal measures to stimulate demand [12][13]. Group 5: Future Outlook - The "15th Five-Year Plan" period will face complex domestic and international challenges, necessitating more flexible and forward-looking macroeconomic policies [15][16]. - Recommendations include refining the policy interest rate system, enhancing the representation of short-term rates in the market, and exploring differentiated pricing templates for specific sectors [16][18].

1. Report Industry Investment Rating Not mentioned in the content. 2. Core View of the Report In May 2025, with the implementation of double cuts and the coordination of multiple tools by the central bank, the capital market remained stable, and the DR007 capital center declined. In June, although there is a liquidity gap, the pre - operation of the outright reverse repurchase and the central bank's usual care during the half - year period are expected to keep the risk of significant capital convergence relatively controllable, and the DR007 price is expected to be in the range of 1.5 - 1.65% [1][3]. 3. Summary According to the Directory 3.1 May Capital and Liquidity Review: Double Cuts Implemented, Capital Center Declined 3.1.1 Capital Review: Slightly Enlarged Capital Fluctuation Range In May 2025, the central bank coordinated multiple tools. After the double cuts, the capital price decreased, and the DR007 capital center dropped from 1.7% to around 1.6%. The fluctuation range of overnight and 7D weighted prices increased. The spread between 7D and overnight funds widened from 2bp at the beginning of the month to 18bp at the end of the month without inversion. The capital stratification pressure was small, and the volatility was at a low level. The trading volume and average daily trading volume of inter - bank pledged repurchase increased slightly compared with April. The net lending scale of state - owned banks recovered, while that of joint - stock banks was at a seasonal low, and the net lending of money market funds declined [8][9][14]. 3.1.2 Liquidity Review: Reserve Requirement Cut, Bank Liquidity Increased The end - of - month excess reserve may increase by 93.84 billion yuan, and the excess reserve ratio may be around 1.3%. The narrow - sense excess reserve level after deducting reverse repurchases may be around 0.7%, still at a relatively low seasonal level. In terms of open - market operations, the central bank actively increased reverse - repurchase investments. MLF had a net investment of 37.5 billion yuan, and the outright reverse - repurchase had a net withdrawal of 20 billion yuan. There was no restart of treasury bond purchases, and treasury deposits were issued for 24 billion yuan [28][33][41]. 3.2 May Monetary Policy Tracking: "Steady Growth" Priority, Double Cuts Implemented in May In May 2025, the double cuts were implemented slightly ahead of market expectations. After the double cuts in the first ten - day period, the capital price decreased. In the middle and last ten - day periods, the central bank gradually shifted from net withdrawal to large - scale net investment. At the end of the month, various tools were used to support the market. The pre - operation of the outright reverse repurchase in June helps stabilize capital expectations. Policy tools include comprehensive use of reserve requirement cuts, interest rate cuts, and adjustments to structural monetary policy tools [46][49][52]. 3.3 June Gap Forecast: Pre - operation of Outright Reverse Repurchase, Limited Capital Gap Pressure 3.3.1 Rigid Gap: Reserve Requirement Releases Excess Reserves, Large - scale Maturity of Outright Reverse Repurchases In June, the reserve requirement for general deposit growth may freeze around 22.56 billion yuan of liquidity, and the MLF maturity is 18.2 billion yuan. The outright reverse - repurchase maturity is 1.2 trillion yuan, with 1 trillion yuan already pre - operated [3][58]. 3.3.2 Exogenous Shocks: Cash Withdrawal and Non - financial Institution Deposits Have a Small Impact on Excess Reserves Cash withdrawal and non - financial institution deposits may slightly consume around 11.52 billion yuan of liquidity [3][60]. 3.3.3 Fiscal Factors: Large - scale Government Bond Issuance, Fiscal Expenditure Concentrated at the End of the Quarter The government deposit may supplement around 40 billion yuan of liquidity, slightly lower than last year's level [3][64]. 3.3.4 Comprehensive Judgment: Pre - operation of Outright Reverse Repurchase, Relatively Stable Capital The total liquidity gap in June is around 1.4 trillion yuan. Considering the 1 - trillion - yuan outright reverse - repurchase already invested, the overall capital gap pressure is relatively limited. The central bank usually provides support during the half - year period, and the DR007 price is expected to be in the range of 1.5 - 1.65% [3][65][69].

Core Viewpoint - The People's Bank of China (PBOC) has reported significant effects of counter-cyclical monetary policy adjustments in the first quarter, with stable growth in financial totals and an optimized credit structure [1][2] Group 1: Monetary Policy and Financial Stability - The PBOC will continue to strengthen the execution and supervision of interest rate policies, aiming to lower bank funding costs and reduce overall social financing costs [1] - In the first quarter, monetary credit maintained reasonable growth, utilizing various tools such as reserve requirements and open market operations to ensure ample liquidity and support key economic sectors [1][2] Group 2: Loan Rates and Economic Development - In March, new corporate loans and personal housing loan rates decreased by approximately 50 and 60 basis points year-on-year, creating a favorable financial environment for high-quality economic development [2] - The PBOC plans to enhance the implementation of interest rate policies and continue reforms to improve the Loan Prime Rate (LPR), while expanding pilot areas for comprehensive financing cost assessments for enterprises [2] Group 3: Future Directions - The PBOC will leverage monetary credit policy to guide financial institutions in supporting technology finance, green finance, inclusive small and micro enterprises, consumption expansion, and stabilizing foreign trade [2] - The scope of re-loans for affordable housing will be broadened to maintain stability in the real estate market [2]

Group 1 - The central bank's decision to cut the reserve requirement ratio by 0.5 percentage points is expected to provide approximately 1 trillion yuan in medium to long-term liquidity to the market [2] - The policy rate was lowered by 0.1 percentage points, which is anticipated to lead to a slight decrease in the Loan Prime Rate (LPR), thereby reducing the burden of existing mortgage rates for homebuyers [2][6] - The reduction in personal housing provident fund loan rates by 0.25 percentage points, with the rate for first-time homebuyers over five years dropping from 2.85% to 2.6%, is expected to stimulate demand in the housing market [2][6] Group 2 - The stock market did not experience a significant rise following the central bank's actions, indicating that the previously anticipated benefits of the rate cuts have already been priced in by the market [3][5] - The stock market is seen as a leading indicator of policy changes, reflecting market sentiment more rapidly than the housing market, which tends to react more slowly [5] - The measures taken by the central bank are aimed not only at stabilizing the stock and housing markets but also at reducing financing costs for the real economy, thereby enhancing refinancing effects [3][6] Group 3 - The decline in LPR is expected to lead to lower rates for existing mortgages, alleviating financial pressure on homeowners and indirectly boosting confidence in the housing market [6] - The central bank's actions are viewed as friendly towards the housing market, with expectations of continued supportive policies in the future [6] - The adjustment period for both the stock and housing markets is expected to shorten under the influence of these favorable policies, with market performance increasingly tied to demand recovery and improvements in economic fundamentals [6]

Monetary Policy Adjustments - The People's Bank of China (PBOC) announced a series of monetary policy measures starting from May 7, including a 0.25 percentage point reduction in the re-lending rate and a 0.5 percentage point cut in the reserve requirement ratio (RRR) for financial institutions [1][2] - The adjustments reflect a moderately accommodative monetary policy stance aimed at supporting employment, businesses, markets, and expectations [1] Long-term Liquidity Support - The RRR cut is expected to provide approximately 1 trillion yuan in long-term liquidity to the market, addressing structural liquidity issues [2] - The PBOC's actions are designed to enhance the stability of bank liabilities and reduce the cost of bank funding, thereby supporting long-term liquidity supply [2][3] Financing Cost Reduction - The PBOC lowered the 7-day reverse repurchase rate from 1.5% to 1.4%, which is anticipated to lead to a decrease in loan market quotation rates (LPR) and deposit rates, ultimately reducing the comprehensive financing costs for the real economy [4] - The reduction in housing provident fund loan rates is expected to save residents over 20 billion yuan annually in interest payments, stimulating housing demand and supporting the real estate market [5] Structural Policy Tools - The PBOC's decision to lower the rates on structural monetary policy tools by 0.25 percentage points is a significant move, impacting various long-term financing tools [6][7] - This comprehensive rate cut is expected to save banks between 15 billion to 20 billion yuan in funding costs annually, encouraging banks to support economic structural transformation [6][7]

Group 1 - The core viewpoint of the news is the introduction of a comprehensive set of financial policies aimed at stabilizing the market and boosting economic growth in response to the current complex economic situation in China [2][4] - The People's Bank of China (PBOC) has lowered the reserve requirement ratio by 0.5 percentage points, which is expected to release approximately 1 trillion yuan in long-term liquidity, thereby increasing market liquidity and reducing financing costs for enterprises [2][4] - A series of support measures for small and micro enterprises have been proposed, including increasing re-lending quotas and optimizing financing coordination mechanisms to alleviate financing difficulties [2][3] Group 2 - The adjustment of the personal housing provident fund loan interest rate by 0.25 percentage points is aimed at enhancing the consumer support function of the provident fund loans, especially in the context of declining commercial loan rates [3] - The National Financial Regulatory Administration has indicated plans to introduce a series of financing systems that align with new models of real estate development, which may lead to increased support for development and mortgage loans [3][4] - The introduction of two monetary policy tools to support the capital market, including securities, fund, and insurance company swap facilities, as well as stock repurchase and increase re-lending, is expected to provide ongoing support for market stability [4]

Core Viewpoint - The Chinese government is implementing a comprehensive set of financial policies aimed at stabilizing the market and managing expectations, with a focus on enhancing liquidity and supporting key sectors such as technology and consumption [1][3]. Group 1: Monetary Policy Measures - The People's Bank of China has introduced three categories of measures: quantity-based policies, price-based policies, and structural policies to enhance liquidity and support economic growth [3]. - A reduction in the reserve requirement ratio by 0.5 percentage points is expected to provide approximately 1 trillion yuan in long-term liquidity to the market [5]. - The policy interest rate has been lowered by 0.1 percentage points, with the 7-day reverse repurchase rate decreasing from 1.5% to 1.4%, which is anticipated to lead to a similar decline in the Loan Prime Rate (LPR) [5]. - The interest rate for structural monetary policy tools has been reduced by 0.25 percentage points, including various special structural tool rates and the PSL rate [5]. - The interest rate for personal housing provident fund loans has been decreased by 0.25 percentage points, reducing monthly payments and total repayment amounts for borrowers [5]. Group 2: Support for Key Sectors - An additional 300 billion yuan has been allocated for re-loans aimed at technological innovation and technological transformation, increasing the total from 500 billion yuan to 800 billion yuan [6]. - A new 500 billion yuan "service consumption and elderly care re-loan" has been established to encourage commercial banks to increase credit support for these sectors [6]. - The quota for agricultural and small business re-loans has been increased by 300 billion yuan, supporting banks in expanding loans to rural, small, and private enterprises [6]. - A risk-sharing tool for technology innovation bonds has been created, allowing the central bank to provide low-cost re-loan funds to support the issuance of long-term, low-cost bonds for technology innovation [6]. Group 3: Regulatory Support and Market Stability - The China Securities Regulatory Commission (CSRC) is enhancing regulatory flexibility for companies significantly impacted by tariff policies, particularly in areas like equity pledges and refinancing [7]. - The CSRC is committed to consolidating market stability and improving monitoring and risk assessment mechanisms to respond to external shocks [7]. - The Financial Regulatory Bureau is set to introduce eight incremental policies to support the real estate market, expand insurance fund investments, and promote financing for small and private enterprises [8].

落地！ 刚刚，央行发布两则公告： 为落实中央经济工作会议精神和《政府工作报告》部署，实施适度宽松的货币政策，提高宏观调控的前瞻性、针对性、有效性，中国人民银行决定，自2025年5月 15日起，下调金融机构存款准备金率0.5个百分点（不含已执行5%存款准备金率的金融机构），下调汽车金融公司和金融租赁公司存款准备金率5个百分点。 | September | | | 中国人民银行 THE PEOPLE'S BANK OF CHINA | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 信息公开 | 新闻发布 | 法律法规 | 货币政策 | 宏观审慎 | 信贷政策 | 金融市场 | 金融稳定 | 调查统计 | 银行会计 | 支付体系 | | | 金融科技 | 人民币 | 经理国库 | 国际交往 | 人员招录 | 学术交流 | 征信管理 | 反洗钱 | 党建工作 | | | 服务互动 | 政务公开 | 政策解读 | 公告信息 | 图文直播 | 央行研究 | 音频视频 | 市场动态 | 网上展厅 | 报 ...