Central Bank: There is still room for RRR cuts and interest rate reductions this year

PANews January 15 News, according to Jintiao's report citing Securities Times, People's Bank of China spokesperson and Vice Governor Zou Lan stated at a State Council Information Office press conference on January 15 that there is still room for reserve requirement ratio (RRR) cuts and interest rate reductions this year. Regarding the statutory deposit reserve ratio, the current average statutory reserve ratio of financial institutions is 6.3%, leaving room for RRR cuts. From the perspective of policy interest rates, externally, the RMB exchange rate is relatively stable, and the US dollar is in a rate-cutting cycle, so the exchange rate does not pose a strong constraint; internally, since 2025, bank net interest margins have shown signs of stabilization. In 2026, there will be large-scale maturities of 3-year and 5-year long-term deposits. The recent adjustments to various structural monetary policy tool rates will help reduce banks' interest expenses, stabilize net interest margins, and create some space for interest rate cuts.
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