BlockBeats news: On January 15, Zou Lan, deputy governor and spokesperson for the People's Bank of China (PBOC), stated at a press conference held by the State Council Information Office that the interest rates for various structural monetary policy instruments would be reduced by 0.25 percentage points. The one-year interest rate for rediscounting loans will be lowered to 1.25%, with corresponding adjustments made for other terms. The PBOC will also improve structural instruments and increase support to further assist in the optimization and transformation of the economic structure.
Zou Lan further added that this year, there is still some room for interest rate and reserve requirement ratio cuts. In terms of the statutory deposit reserve ratio, the current average statutory deposit reserve ratio for financial institutions is 6.3%, indicating that there is still room for a reserve requirement ratio cut. Regarding policy interest rates, in terms of external constraints, the RMB exchange rate is currently stable, and the U.S. dollar is in a rate-cutting cycle, so the exchange rate does not impose strong constraints. In terms of internal constraints, since 2025, the net interest margin of banks has already shown signs of stabilization. In 2026, a large amount of long-term deposits with terms of three and five years will mature. This time, the reduction in interest rates for various structural monetary policy tools will help reduce banks' interest expenses, stabilize their net interest margins, and create some room for further interest rate cuts.