Pan Gongsheng: The People's Bank of China will strengthen macroeconomic regulation and introduce three categories of ten monetary policy measures

Pan Gongsheng, the Governor of the People's Bank of China, stated today at a press conference held by the State Council Information Office that in order to implement the spirit of the Central Political Bureau meeting on April 25, further carry out a moderately loose monetary policy, and promote high-quality economic development, the People's Bank will strengthen macroeconomic regulation and introduce a package of monetary policy measures, mainly consisting of three categories and ten policies:

First, quantity-based policies, through measures such as reserve requirement ratio cuts, will increase the supply of medium- and long-term liquidity and maintain ample market liquidity. Second, price-based policies will lower policy interest rates and reduce the interest rates of structural monetary policy tools, while also lowering the interest rates of housing provident fund loans. Third, structural policies will create and strengthen the implementation of structural monetary policy tools to support technological innovation, expand consumption, and promote inclusive finance.

First, the reserve requirement ratio will be lowered by 0.5 percentage points, which is expected to provide approximately 1 trillion yuan in long-term liquidity to the market.

Second, the reserve requirement system will be improved, and the reserve requirement ratio for auto finance companies and financial leasing companies will be temporarily reduced from the current 5% to 0%.

Third, the policy interest rate will be lowered by 0.1 percentage points, meaning the 7-day reverse repurchase operation rate in the open market will be reduced from the current 1.5% to 1.4%, which is expected to lead to a simultaneous decline of about 0.1 percentage points in the loan market quoted interest rates.

Fourth, the interest rates of structural monetary policy tools will be lowered by 0.25 percentage points, including: the interest rates of various special structural tools and the interest rates of re-loans for supporting agriculture and small enterprises will be reduced from the current 1.75% to 1.5%; the interest rate for supplementary mortgage loans will be reduced from the current 2.25% to 2%.

Fifth, the interest rate for personal housing provident fund loans will be lowered by 0.25 percentage points, with the interest rate for first-time homebuyers with a term of more than five years reduced from 2.85% to 2.6%, and the interest rates for other terms will be adjusted accordingly.

Sixth, the quota for re-loans for technological innovation and technological transformation will be increased by 300 billion yuan, from the current 500 billion yuan to 800 billion yuan, to continuously support the implementation of the "two new" policies.

Seventh, a re-loan of 500 billion yuan for "service consumption and elderly care" will be established to guide commercial banks to increase credit support for service consumption and elderly care.

Eighth, the quota for re-loans supporting agriculture and small enterprises will be increased by 300 billion yuan, forming a synergistic effect with the policy of lowering related tool interest rates, supporting banks to expand loans to agriculture, small and micro enterprises, and private enterprises.

Ninth, two monetary policy tools supporting the capital market will be optimized, merging the 500 billion yuan swap convenience for securities, funds, and insurance companies with the 300 billion yuan re-loan for stock repurchase increases, for a total quota of 800 billion yuan.

Tenth, a risk-sharing tool for technological innovation bonds will be created, with the central bank providing low-cost re-loan funds that can be used to purchase technological innovation bonds, and cooperating with local governments and market-oriented credit enhancement institutions to share part of the default loss risk through diversified credit enhancement measures, providing support for technological innovation enterprises and equity investment institutions to issue low-cost, long-term sci-tech innovation bonds for financing