Zhou Hao: Under the idea of counter -cyclical regulation, the reduction is to force commercial banks to find assets for funds by increasing the supply of funds.

The rumors of the RRR cut on April 1 last weekend made the market and the central bank look a bit calm.Due to the surge in stocks without expectations, the news about the reduction of the standards in various WeChat groups spread unscrupulously, while the People's Bank of China rarely rumored through the media in the evening, saying that the rumors of the RRRC on April 1 were not true.The official manufacturing PMI data announced on Sunday is expected that such news would have cool down the expectations of the RRRC, but the market still has a very clear or even stronger reduction expectation.Intersection

In fact, there is a long time for the expectations of reduction. The reason seems to be sufficient: in April, due to the large -scale open market operation expiration and the factors of fiscal payment, there may be a certain short -term liquidity tension.In order to make up for the liquidity gap, the central bank needs to perform liquidity injection operations, and compared with MLF and other operations, the cost of funding brings is relatively low. In addition, monetary policy intends to support the background of the real economy.It is considered a key factor that will inevitably come.

In other words, the reason for the reduction is more technical, that is, supplemented the possible liquidity gap, but the market is particularly loved to talk about it. Why is this?The author believes that this is highly related to the performance of the stock market.Since the end of last year, the Chinese stock market has a long -lost rebound, and the stock market is now in a key and sensitive position. The market naturally is particularly sensitive to various favorable factors mdash; MDASH; in fact, in the past few rounds of reduction in the past few roundsThe market has not paid special attention to it. Instead, the more you lower the quote, the more you are worried about the economy (the market always tends to think that the regulatory layer has more data that cannot be released).

However, the rise in the stock market makes the market tend to think that management intends to take care of the stock market. Therefore, various views of reforms, buffalo and other views have emerged endlessly, and it has gradually occupied the highland of public opinion. Under such expectations, the market is willing to believe and look forward to all kindsgood news.

Economic fundamentals will not change tremendous changes in one or two quarters, but market emotions will be reversed instantly. This is the reality of economic and financial markets.Faced with such emotional changes, monetary policy had to respond.For example, in the third and fourth quarters of last year, the market's prospects for the Sino -US trade war and China's economy were extremely pessimistic.But suffering from policy dependence. Even if the central bank intends to cool down such expectations, there are quite some rats. They can only hope that the market sentiment can not be excessive through rumors.

Historically, such expected management is difficult to achieve rapid success. The market often looks at the problem from the positions in the hands. The real emotional reversal often appears after multiple policy intervention is invalid and eventually tighten the policy.A recent similar incident appeared in 2016. In the first quarter of 2016, the economy performed well. The market was looking forward to the U -type or even V recovery.It means that the economic outlook is likely to be L, and it is believed that debt and structural issues will still bother the Chinese economy for a long time.

However, the market really reversed until the monetary policy was obviously tightened at the end of 2016, and the deleveraging and removal foam appeared in the central document.This also means that from the beginning of May to the end of the year, the market still adds leverage according to its own inertia. Such operations are particularly obvious in the bond market.The operation also once hit the 10-year national bond yield to 2.6-2.7%of the historical low.

If we understand the market habits, we can also understand that in the face of excitement, any policy warning may be regarded as an ear, and any favorable rumors may be used by the intentional people.Regarding the reduction, rumors of the market have been rumored to the central bank, which actually reflects such a market and policy game.

But in fact, the effect of the reduction depends to a large extent on risk preferences.To solve the so -called liquidity gap problem, the central bank has several methods including the reduction. Historically, although there may be some liquidity shocks in the market, the overall supply and demand status of the market is still balanced.The only difference is that the surrender is generally considered a relatively strong type, but if the market only stares at the strength rather than the effect, then people have to doubt their motivation.

Therefore, in order to make up for possible liquidity impacts, the reduction is not a required option.The next question is, what policy needs should be available if the choice is reduced?

In theory, after the reduction, there will be more idle funds in the banks. These funds can be used to purchase bonds or put loans, that is, the number of assets held by banks.In the process, the deposit in the banking system will also increase, so that the bank will pay the legal deposit reserve proportion and store a certain reserve payment, legal deposit reserve and reserve deposit on the central bank in addition to the legal deposit reserve.The sum is the basic currency in the entire banking system.

It should be pointed out that if the risk preferences of commercial banks are high enough and the capital is sufficient at the same time, the relatively small basic currency can also support more asset expansion, which is reflected in the rise in currency multiplication.And if the risk preferences of commercial banks are low and the asset expansion is insufficient, the central bank may drive it by reducing the legal deposit reserve and making it a excess deposit reserve (that is, the reserve fund) to drive commercial banksThe final policy purpose is to provide credit support for the entity.

From the above analysis, it can be seen that under the idea of counter -cyclical regulation, the reduction is to force commercial banks to find assets for funds by increasing the supply of funds.The role is limited MDASH; MDASH; because the increase in the deposit of the final banking system still requires commercial banks to expand asset expansion.

However, the fiery performance of the stock market at the moment seems to mean that the risk preferences of the market have obviously risen, and at the same time, various data performance is good, and inflation may even be short -term.What about the fire?The author's point is that you can wait.

Simply sort out, you can find that the dispute between the rally or not now has surpassed whether the liquidity itself is abundant.As the author pointed out, there are several kinds of liquidity management methods. Everyone is so real in terms of rarement, and it reflects that the market and the central bank have different views on some issues.On the one hand, the central bank's rumor reduction is not wanting to be abducted by the market, and on the other hand, it implies that it is unwilling to reduce the standard in the short term, and is willing to supplement the liquidity gap in other ways.The market downdown is still high. On the one hand, it shows that the market is afraid of falling out, and on the other hand, it also implies that the market is still eager to eager for monetary policy.

Note: This article only represents the author's personal point of view