Zhengzhou Securities: The net injection of MLF is to supplement medium-term liquidity for banks, and there may still be a reserve requirement ratio reduction to provide long-term funds in the future.

Jin10 data reported on April 25 that China Merchants Securities stated in a report that the central bank’s net injection of 500 billion yuan in medium-term lending facilities (MLF) this month reflects a signal to supplement medium-term Liquidity for banks. Given that the scale of interbank financing remains lower than the levels in the second half of last year, it is appropriate to supplement medium-term funds for banks. Currently, the uncertainty in the external environment has increased, and it is still necessary for the Central Bank’s monetary policy to maintain a moderately accommodative stance to stabilize the economy. The Central Bank may still reduce the reserve requirement ratio, thereby providing long-term funds for banks, and it is expected that the moderately accommodative liquidity environment will continue.