Central Bank Hints at Policy Easing
During a recent press conference, Deputy Governor Zou Lan of the People's Bank of China indicated that there remains room for both reserve requirement ratio (RRR) and benchmark interest rate cuts in 2025. The current average RRR stands at 6.3%, leaving room for further adjustments.
External Conditions Favorable
The yuan exchange rate has remained relatively stable, while the US dollar enters a rate-cutting cycle, making external pressures manageable for monetary policy.
Domestic Fundamentals Improving
Bank net interest margins have shown signs of stabilization since 2025. A large volume of long-term deposits will mature in 2026, expected to ease funding cost pressures on banks.
- Policy tool rate cuts already implemented
- Help reduce interest payment burdens
- Create space for potential rate reductions