RRR Cut Hopeless? PBoC Adds 486 B in 6 Days

The PBoC continues to rely on short-term market intervention, slowing killing hopes that the bank would resort to a cut in the reserve requirement ratio.

With the drop in the second half of the quasi-increasing demands, the central bank has quickened MLF (medium-term loans to facilitate) the frequency of operation, does this mean that short-term drop quasi hopeless?

...July 18, the central bank announced that the banking system in order to maintain adequate liquidity and reasonable combination late July MLF (mid-term lending convenient) expires 218.5 billion yuan, the central bank of 14 financial institutions operating MLF total 227 billion yuan, of which 3 months of 53 billion yuan, 134.5 billion yuan for 6 months, 1 year 39.5 billion yuan, interest rates were flat, respectively, 2.75%, 2.85%, 3.0%.

This is carried out in six days the MLF operating the central bank a second time. July 13, the central bank has carried out a total of 259 billion yuan of operating MLF 13 financial institutions. Analysis of the industry, this means that the central bank is expected to further decline in the second half of the RRR.

RRR cut and short-term lending are convenient tools can serve the purpose of monetary easing, but the RRR cut is much stronger, once lax monetary policy, or will bring pressure to devalue the RMB. This year, the central bank liquidity operations release more cautious, tends to use reverse repo, the mid-lending operation convenience (MLF) and other monetary instruments in place to cut interest rates drop quasi "precise drip" style served as the main measures to cope with the liquidity gap.

iFeng: 降准会不会来?央行六日之内放水达4860亿

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