Analyst: Both reserve requirement ratio cuts and interest rate cuts are beneficial for the continued downward trend of the financial center.

Huatai Securities researchers Zhang Jiqiang and Wu Yuhang and others reported that both reserve ratio cuts and interest rate cuts are benefiting the continued downward trend of the central capital. The reserve ratio cut will drive the excess reserve rate to rise, and is expected to replace high-cost tools such as buy-back reverse repos, easing the pressure on the liability side of large banks. The pricing of large banks' funding outflows is expected to continue to decrease. The reverse repo rate has been lowered to 1.4%, becoming the new central capital. Even considering maintaining a certain interest rate differential between market rates and policy rates, the 7-day repurchase rate for deposit-taking institutions is expected to drop to the 1.5%-1.7% range.