One, what does it mean to cut the quota
What does it mean to cut the quota? Reducing the quota is to reduce the deposit reserve ratio. Deposit reserve is the government in order to avoid risk, part of the money of the user deposits to the central bank, the rest of the part of the commercial banks in the commercial banks, for the operation of the bank. Deposit reserves are mandatory to prevent risks such as crowding out, and deposit reserves are mandatory to pay.
For example: if the reserve requirement ratio is 20%, and you deposit $100 in the bank, the commercial bank has to pay $20 to the central bank and can only lend out $80. In other words, the bank only has 80 dollars to earn interest differentials.
Reducing the reserve requirement ratio is a great role, the reserve requirement ratio reduced by one point, commercial banks can release a lot more loans, the bank can also earn more interest margin. However, lowering the reserve requirement ratio can also lead to an increase in financial risk. If the financial risk does not increase, the reserve requirement ratio can be lowered to a very, very low level, so the reserve requirement ratio is not lowered whenever you want.
The reserve requirement ratio cannot be raised as high as you want it to be. Because if the reserve requirement ratio goes up too high, the interest margin earned by the banks will be too small to sustain.
Two, the impact of the quasi-demand cut on housing prices
The impact of the quasi-demand cut on housing prices people hold two views, one is that the quasi-demand cut will stimulate housing prices, the main reason is that the quasi-demand cut releases a large number of bank loans to increase the amount of money that can be made available to more people for home loans, home loan demand rises, then the price of the house will rise; the other is conducive to stabilize the prices of housing prices, the main reason is that the central bank cuts the quasi-demand cut, enter the market The main reason is that the central bank cut the rate, into the market, into the property market is not much, then the stabilization of house prices is instead favorable.
On the face of it, the central bank cut the quasi-periodic release of 800 billion long-term is a loan, coupled with the requirements of the current policy to reduce interest rates can be said to be a direct benefit to the real estate industry in great demand. However, in the past two years has been maintaining housing prices, tightening real estate finance, trust has become the norm. Narrowed financing channels directly affect some of the real estate enterprises to take land, development plans.
Tightening of real estate finance, individual commercial housing loan interest rates rise, the new loan algorithm forced to add points to become a direct factor on the side of home buyers to increase the cost of home purchase. The central bank to reduce the release does not flow into the home buyers side of the loan. Therefore, by the impact of interest rate increases in costs, home buyers for the degree of wait-and-see to buy a home will be increased. Therefore, the cut is also for the benefit of home buyers commercial loans.
Three, the quasi-reduction is a rate hike or a rate cut
October 7, the central bank announced a 1% cut, this cut is about the release of 1.2 trillion yuan, which is used to pay back the October 15 due MLF 450 billion yuan, in addition to the release of 750 billion yuan. This is the third time since 2018 that the central bank has cut the quota. in April and June 2018, the central bank reduced the reserve by 1% and 0.5% respectively, and this time the central bank cut the quota by 1% again. So far this year, the statutory reserve requirement ratio has been cut by a total of 2.5%.
On the question of whether the rate cut is a rate hike or a rate cut, different people have different views, which are detailed below.
Opinion 1: If it is a rate cut, it can only be a downward adjustment of the MLF rate and the reverse repurchase rate, or a targeted interest rate cut for small and micro-enterprises;
Opinion 2: If it is an interest rate hike, an increase in the MLF rate and the reverse repurchase rate or even an increase in the benchmark deposit and lending rates are possible, after all, the benchmark rate is really too low now.
The above is about what it means to cut the rate, the impact of the rate cut on housing prices, the rate cut is a rate hike or a rate cut, I hope it can help you!