According to Jinshi Data, Liao Zhiming, chief fixed income analyst at Huayuan Securities, predicts that there is a high possibility of a reserve requirement ratio cut before the Spring Festival, with the range possibly reaching 50 basis points, to cope with liquidity disturbances during the Spring Festival.
In addition, the peak of new loans and government bond issuance in January will increase the demand for liquidity. The industry believes that policies such as lowering the reserve requirement ratio and interest rates will help stabilize the economy and market expectations.
Special government bond funds may also be used to support consumption upgrades and policy continuation.