Vice Governor of the Central Bank: There is still some room for reserve requirement ratio cuts and interest rate reductions this year

According to Jinshi Data, on January 15, at a press conference held by the State Council Information Office, the spokesperson and vice president of the People's Bank of China, Zou Lan, stated that there is still some room for reserve requirement ratio (RRR) cuts and interest rate reductions this year. Currently, the average statutory deposit reserve ratio for financial institutions is 6.3%, indicating that there is still room for RRR cuts.

In terms of policy interest rates, regarding external constraints, 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; regarding internal constraints, since 2025, the bank's net interest margin has shown signs of stabilizing, and there will be a large amount of three-year and five-year long-term deposits maturing in 2026. This reduction in the rates of various structural monetary policy tools will help lower banks' interest payment costs, stabilize the net interest margin, and create some room for interest rate cuts.