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Lowering the reserve requirement ratio and policy interest rates, guiding the reduction of existing housing loan interest rates, promoting medium and long-term capital into the market... Recently, financial regulatory authorities have introduced a series of significant financial policies, sending a strong signal of financial support for the stable growth and high-quality development of the economy. With the support of a range of existing and incremental policies, social expectations have improved significantly, and market confidence has been greatly enhanced.

This year, China's economy has been generally stable and making progress, while also encountering some new situations and issues. The Politburo meeting of the CPC Central Committee held on September 26 emphasized the need to focus on key points, take initiative, effectively implement existing policies, and strengthen the introduction of incremental policies to further improve the targeting and effectiveness of policy measures.

On September 27, the People's Bank of China announced that starting from the 27th, the reserve requirement ratio for financial institutions would be reduced by 0.5 percentage points (excluding financial institutions that have already implemented a 5% reserve requirement ratio). After this adjustment, the weighted average reserve requirement ratio for financial institutions is approximately 6.6%. On the same day, the People's Bank of China issued an announcement to adjust the 7-day reverse repo operation interest rate from 1.7% to 1.5%, a decrease of 20 basis points.

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"Our country adheres to a supportive monetary policy stance, increases the intensity of monetary policy regulation, and improves the precision of monetary policy regulation, creating a good monetary and financial environment for the stable growth and high-quality development of the economy," said Dong Ximiao, Chief Researcher at China United. The People's Bank of China has exerted efforts from both the total amount and price aspects this time. In terms of the total amount, this reserve requirement ratio reduction is the second of the year, and it is expected to release about 1 trillion yuan in long-term liquidity; in terms of price, the policy interest rate has been reduced by 20 basis points, which is the largest decrease in nearly four years.

"The intensity of reserve requirement ratio reduction and interest rate reduction is significant, and the measures are timely," said Ye Yindan, a researcher at the Bank of China Research Institute. The reduction of the reserve requirement ratio will provide the banking system with long-term low-cost funds, enhancing the motivation and sustainability of banks to serve the real economy. Under the market-oriented interest rate regulation mechanism, the reduction of policy interest rates will lead to a decline in various market benchmark interest rates, promoting the reduction of corporate financing costs, expanding domestic demand, and releasing the potential for consumption and investment.

The increased implementation of monetary policy provides strong support for credit growth. "The People's Bank of China's reduction of the reserve requirement ratio by 0.5 percentage points this time will further release more long-term funds and optimize the structure of bank funds. Next, our bank will focus on serving the real economy, around doing well in the 'five major articles', accurately grasping the direction of business development, and continuously increasing the allocation of funds to key areas and weak links," said a person in charge of the Ningbo branch of the Bank of Communications.

Guiding banks to reduce existing housing loan interest rates, unifying the minimum down payment ratio for housing loans, extending the term of two real estate financial policy documents, optimizing the policy of re-lending for affordable housing, and supporting the acquisition of existing land by real estate companies... Recently, financial regulatory authorities have announced five financial policies related to the real estate market, aiming to promote the stable and healthy development of the real estate market.

Efforts are made on both the supply and demand sides to improve real estate financial policies. From the demand side, the People's Bank of China guides commercial banks to reduce the interest rates on existing housing loans to near the interest rates on newly issued loans, with an expected average reduction of about 0.5 percentage points; the minimum down payment ratio for the first and second homes nationwide is unified at 15%, better supporting the rigid and diversified improvement of housing needs for residents and families.

Mr. Zhang, who lives in Qingdao, Shandong Province, has recently been paying attention to improved housing. "The current house is a bit small, and I want to buy a three-bedroom apartment near the child's school," said Mr. Zhang. The policy of reducing the interest rate on existing housing loans and lowering the minimum down payment ratio is a great benefit for their family.

Data shows that as of the end of June, the balance of personal housing loans in China was 37.79 trillion yuan. The reduction of the interest rate on existing housing loans will truly reduce the monthly burden on families who have purchased houses, and it is expected to benefit 50 million households and 150 million people, saving about 150 billion yuan in family interest expenditure per year on average."Reducing the interest rates on existing mortgages will lower the interest expenses for borrowers, alleviate their repayment pressure, enable them to increase other consumption expenditures, and reduce the behavior of prepaying loans," said Dong Ximiao.

Financial regulatory authorities have also introduced a number of favorable policies for the supply side. For example, the People's Bank of China and the China Banking and Insurance Regulatory Commission decided to extend the phased policies such as loans for commercial properties until the end of 2026, which will help further activate the stock assets of real estate companies, improve their cash flow, and promote a virtuous cycle between finance and real estate.

As early as April, the Shanghai headquarters of the People's Bank of China and the Shanghai Regulatory Bureau of the China Banking and Insurance Regulatory Commission organized a concentrated signing meeting for loans for commercial properties in Shanghai, with 8 major commercial banks and 12 real estate companies participating, signing a loan amount of 14.6 billion yuan. The extension of the policy for loans for commercial properties will continue to strongly support the financing of private real estate companies.

"The additional real estate financial policies in this round have not changed the consistent policy orientation, and the connection between old and new policies is steady and orderly," said Wen Bin, Chief Economist of China Minsheng Bank, indicating that the financial policy support has been increased, sending a clear signal to stabilize the real estate market.