China Securities Journal: Lowering reserve ratio releases trillions of liquidity, experts believe there may still be room for further cuts in reserve requirements by the end of the year.

The first reduction of the reserve requirement in 2025 took effect today, injecting approximately 1 trillion yuan of liquidity into the financial market. Experts say that considering both internal and external factors, there is still room for further easing in monetary policy in the direction of "moderate easing," which can provide crucial support for effectively hedging external fluctuations and stabilizing macroeconomic conditions. Luo Zhiheng, chief economist and director of the research institute at Yuekai Securities, stated that after this reduction, the overall average reserve requirement ratio in China has decreased to 6.2%, with room to further decrease by 1 to 2 percentage points towards the historical low of 6.0%. Wang Qing, chief macro analyst at East Money, believes that the People's Bank of China may resume net purchases of treasury bonds in the open market to inject long-term liquidity into the banking system as an alternative to reserve requirement reductions. Lian Ping, chief economist at Guangkai Research Institute, stated that to release more medium and long-term funds to meet market demand, a suitable reduction in reserves for the full year of 2025 would be between 0.75 to 1 percentage point.