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The People's Bank of China cuts interest rates by 0.25 percentage points structurally, with room for further reserve requirement ratio cuts and interest rate reductions later this year

By: theblockbeats.news|2026/01/15 17:30:13
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BlockBeats News, January 15, Zou Lan, spokesperson and deputy governor of the People's Bank of China, stated today at the State Council Information Office press conference that the rates of various structural monetary policy instruments have been cut by 0.25 percentage points, with the one-year benchmark lending rate for various types of reloans lowered to 1.25%, and rates for other tenors adjusted accordingly. Improving structural tools and increasing support will further boost economic structural transformation and optimization.

Zou Lan further stated that looking ahead this year, there is still room for reserve requirement ratio cuts and interest rate reductions. From the statutory reserve ratio perspective, the current average statutory reserve ratio for financial institutions is 6.3%, indicating that there is still room for reserve requirement ratio cuts. From the policy rate perspective, in terms of external constraints, the current RMB exchange rate is relatively stable, the U.S. dollar is in an interest rate reduction trend, and the exchange rate does not pose a strong constraint; in terms of internal constraints, since 2025, there have been signs of stabilization in banks' net interest margin, and in 2026, there are significant amounts of 3-year and 5-year long-term deposits maturing. This round of reductions in various structural monetary policy instrument rates will help reduce banks' interest payment costs, stabilize net interest margins, and create room for interest rate cuts.

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