The Direct Reason Is That The Growth Rate Of Foreign Exchange Is Obviously Slowing Down.

"The direct reason for this reduction is that the growth rate of foreign exchange accounts has slowed down obviously and the basic money supply channels have undergone fundamental changes," said Lian Ping, chief economist at Bank of communications.

In recent years, due to the influx of foreign exchange, the equivalent value of the central bank's foreign exchange purchase has been maintained at a high level.

In order to hedge foreign exchange holdings, the central bank has repeatedly raised the deposit reserve ratio.

With China entering the new normal economic development, the economic growth has changed from high speed to high speed, the balance of payments has shifted from a large double surplus to a small surplus, and the growth rate of foreign exchange has slowed down considerably, with an increase of only about 700000000000 yuan in 2014.

Since the beginning of this year, the RMB has continued to depreciate against the US dollar, and the spot rate of RMB against the US dollar has closed for several days. The growth rate of foreign exchange in January is likely to further slow down.

"Under such circumstances, it is necessary for the deposit reserve ratio to make a reverse adjustment in light of the changes in the situation. It is imperative to reduce the deposit rate.

Lian Ping said, "rough estimate, this time will release nearly 700 billion yuan of funds, can effectively alleviate market liquidity tension."

The deposit reserve refers to the deposits prepared by financial institutions in the central bank for the purpose of ensuring the clients' withdrawal of deposits and the need for clearing funds. The ratio of the deposit reserve required by the central bank to its total deposits is the deposit reserve ratio.

Lian Ping thinks that

After downgrading, on the one hand, banks pay less to the central bank and increase their loanable funds, which is conducive to easing the financing difficulties of enterprises. On the other hand, after the relatively ample bank deposits, the phenomenon of vigorously drawing deposits will be reduced, and the cost of debt is expected to decline, thereby driving down the interest rate of loans, which is conducive to alleviating the high cost of corporate financing.

Yin Jianfeng, deputy director of the Financial Research Institute of the Chinese Academy of Social Sciences, said that the factory price (PPI) of industrial products in China has been negative for 34 consecutive months. In December last year, the consumer price index (CPI) rose by only 1.5%. The CPI increase after deducting food was only 0.8%, deflation pressure had to be prevented. "Anti deflation and steady growth, monetary policy must be launched."

In the meantime, the central bank also directed an additional reduction in the number of relevant commercial banks, non County commercial banks and the Agricultural Development Bank of China.

"This move is intended to increase support for small and micro enterprises, agriculture, rural areas and farmers, major water conservancy projects and other weak links, which is conducive to economic restructuring."

Yin Jianfeng said.

Experts predict that the memory rate will also be reduced by 1 to 2 times in a year, and the direction of monetary policy remains unchanged.

Lian Ping analysis

Under the external environment of large-scale quantitative easing and the strengthening of the US dollar, plus the downward pressure on China's economy, China will face currency in the first half of the first quarter.

And the pressure of capital outflow is difficult to change.

"It is estimated that there will be 1 to 2 times and 0.5 percentage points reduction in the reserve ratio."

"Since the interest rate cut in November last year needs further observation, the current one-year lending benchmark interest rate is 5.6%, which is close to the lowest level of 5.31% over the past 10 years, and there is little room for further reduction, especially considering that the interest rate cut will narrow domestic and foreign spreads and aggravate capital outflows, and the possibility of reducing interest rates in the short term is unlikely."

Lian Ping said, "if the downward pressure on the economy continues to increase, it will not exclude the possibility of a 1 reduction in interest rates within a year, but the possibility of reducing interest rates for many times is very small."

In recent years, the central bank has been lowering interest rates and lowering the accuracy. Does this mean that monetary policy is turning?

"Small adjustments in interest rates and deposit rates are within the framework of a prudent monetary policy, and have not changed the direction of policy. Only by adjusting interest rates and adjusting interest rates many times to mean changes in the tone of monetary policy", Lian Ping, for example, in October 2008 and November, in the short two months, the central bank has repeatedly cut interest rates and lowered its benchmark. The keynote of monetary policy has shifted from "tight" to "moderately loose", which is the direction of monetary policy pformation.

"Monetary policy is only fine-tuning without turning, and there is no strong stimulus. It just shows that we still have a fixed power in macroeconomic regulation and control."

Lian Ping frankly.

Lian Ping said that the reduction also gave a positive signal to the market: monetary policy is flexible, and all tools can be used according to actual needs, and there is no so-called "forbidden zone".