Galaxy Securities: A 50 basis point reserve requirement cut in the first quarter is still expected to be implemented, while a comprehensive interest rate cut will still await the right timing.

Galaxy Securities pointed out that on January 15, 2026, the central bank released the financial data for December 2025 and held a press conference. The financial data for December had two important positive signals: residents' deposits were once again on the move, and there was a resurgence in medium and long-term loans to enterprises. At the press conference, the People's Bank of China introduced eight structural monetary policy measures and emphasized that in the implementation process, it will coordinate closely with fiscal policies such as interest subsidies, guarantees, and risk cost sharing. Meanwhile, the central bank pointed out that there is still room for further reserve requirement ratio cuts and interest rate reductions this year. The easing of structural monetary policy tools was implemented in January as expected. Galaxy Securities believes that the current monetary policy is showing a high degree of synergy with fiscal policy, and a 50 basis point reserve requirement ratio cut in the first quarter is still expected to happen, while a comprehensive interest rate cut will wait for the right timing. Stabilizing expectations, employment, and the market will be the main focus to observe the possible implementation of a comprehensive interest rate cut.