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Experts weigh in on central bank move to cut RRR

By Yu Xiaoming | chinadaily.com.cn | Updated: 2020-01-02 14:25

Li Qilin, chief analyst at Yuekai Securities

Presently, it's not obvious to see lending rates move downward, due in part to the higher cost of debt, which leads to banks being unwilling to cut their lending rates.

The RRR cut is equivalent to providing low-cost debt for banks. It plays an important role in reducing the cost of capital, and then reduces the financing cost of the real economy. Furthermore, it could dredge up monetary policy transmission channels, motivate the vitality of market players, and further make sure the market forces will play a decisive role in the allocation of resources.

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