HUAXI Securities Liu Yu: After structural interest rate cuts, further rate cuts need to wait

In a research report, Liu Yu and others from HUAXI Securities stated that the increase in the amount of structural tools and interest rate cuts has reduced the likelihood of interest rate cuts before the Spring Festival; however, a reserve requirement ratio cut is still possible. The reserve requirement ratio cut is more about supplementing medium- and long-term liquidity and boosting sentiment, while interest rate cuts directly drag down banks' net interest margins. Considering that the current reverse repurchase rate is only 1.4%, significantly lower than the 2% inflation target, there is still room for interest rate cuts, but it may not be substantial. It is expected that interest rate cuts will be more cautious compared to reserve requirement ratio cuts