According to Jinshi.com, the macroeconomic research team of Haitong Securities said that from a fundamental perspective, the domestic economy still needs active policies to stabilize, and monetary policy needs to be further relaxed to expand demand and stabilize growth. CPI and PPI data indicate that demand still needs to be further consolidated. The 25bp adjustment will help promote investment and consumption, boost financing demand, and is also a reflection of the pre-emptive efforts of monetary policy.
On the other hand, the central bank has continuously lowered deposit rates, reserve requirement ratios and re-lending rates in recent months, all of which have helped reduce the liability costs of financial institutions and freed up space for the LPR to fall.