Central Bank: There is still room for reserve requirement ratio and interest rate cuts this year.

PANews reported on January 15th, citing the Securities Times, that Zou Lan, spokesperson and vice governor of the People's Bank of China, stated at a press conference held by the State Council Information Office on January 15th that there is still room for further reserve requirement ratio (RRR) and interest rate cuts this year. Regarding the statutory reserve requirement ratio, the current average for financial institutions is 6.3%, leaving room for further reductions. As for policy interest rates, external constraints include a relatively stable RMB exchange rate and a declining US dollar, meaning the exchange rate does not pose a strong constraint. Internal constraints include signs of stabilization in bank net interest margins since 2025, and a significant amount of 3-year and 5-year long-term deposits maturing in 2026. The current reduction in interest rates for various structural monetary policy tools will help lower banks' interest costs, stabilize net interest margins, and create room for further interest rate cuts.