The industry expects a reserve requirement ratio cut and interest rate reduction in the third quarter, with policy rates potentially lowered by 10 to 20 basis points

According to Jinshi reports, Dong Ximiao, chief economist of Zhailian, expects that a reduction in the reserve requirement ratio and interest rates may be implemented in the third quarter. If the momentum for economic recovery weakens marginally in the second half of the year, a timely reduction of the policy interest rate by 10 to 20 basis points cannot be ruled out.

Regarding the reserve requirement ratio, there is still room for a reduction of 25 to 50 basis points within the year, with the implementation window possibly arranged during peak bond supply or periods of tight liquidity. The People's Bank of China will increasingly utilize structural monetary policy tools to strengthen the regulation of market liquidity.