CITIC Securities: RRR cut and interest rate cut for re-lending have been implemented, and there is still some room for further RRR cuts and interest rate reductions.

The CITIC Securities research report stated that the central bank lowered the interest rates of various types of rediscount tools by 25 basis points, but this measure is not a traditional reverse repurchase rate or LPR rate cut, but rather a targeted effort through structural tools. We believe that this move will help improve the enthusiasm of banks to lend, promote stable credit growth, and to a certain extent alleviate the pressure on bank interest rate differentials. At the same time, the central bank is also advancing the expansion and innovation of rediscount tools, with a dual effect of "quantity expansion + direction guidance", continuously strengthening targeted support for key areas, and helping to promote the optimization of credit structure towards technology, green development, inclusive finance, aging care, and digitalization. In terms of overall policies, the central bank stated that there is still some room for reserve requirement ratio cuts and interest rate cuts this year. However, with continued export prosperity and manageable short-term economic momentum, we expect that policy tightening in the short term will remain restrained, with the potential interest rate cut for the whole year at around 10 basis points. As for exchange rates, the central bank will continue to adhere to the policy of "maintaining basic stability at a reasonable and balanced level". We believe that in the short term, the focus of policies will remain on preventing exchange rate overshooting, improving expectation management, and enhancing corporate exchange rate hedging capabilities, rather than seeking trade competitive advantages through currency adjustments.