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    Home > Coatings News > Paints and Coatings Market > The central bank cuts the RRR, whether the demand for construction emulsion can usher in a recovery

    The central bank cuts the RRR, whether the demand for construction emulsion can usher in a recovery

    • Last Update: 2021-05-01
    • Source: Internet
    • Author: User
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    The People's Bank of China decided to lower the RMB deposit reserve ratio of large state-owned commercial banks, joint-stock commercial banks, postal savings banks, city commercial banks, non-county rural commercial banks, and foreign banks by 0.
    5 percentage points from July 5, 2018.

    The central bank’s goal of this targeted RRR cut is aimed at supporting market-based legalization of "debt-to-equity swap" and small and micro enterprise financing.
    First of all, for construction emulsion companies, although most of the production capacity is concentrated in the hands of big companies like Badfu and Baolijia, there are still many small and medium-sized enterprises across the country.
    For these small and medium-sized enterprises, they are under the pressure of today's environmental protection.
    The problem of funding has always been the foundation of their survival.
    This targeted RRR cut may bring new hopes for the financing and debt-to-equity swaps of these companies in the future, thereby alleviating their financial pressure.

    Secondly, over the years, the central bank’s RRR cut has always been beneficial to the property market.
    Although the current round of RRR cuts are targeted and seem to have nothing to do with the property market, this does not mean that funds will not enter the property market again through other channels, especially for For the current extremely hot third- and fourth-tier real estate markets, the stimulus of funds may ease the financial pressure on developers and accelerate their construction speed.
    The development of real estate is positively related to construction emulsion.
    Accelerated construction of real estate will inevitably drive the release of demand for construction emulsion.
    However, since the RRR cut is targeted, its impact will inevitably not directly affect the real estate market, but it will still indirectly affect the market.
    The market has a certain impact.

    Jin Lianchuang believes that the central bank’s current round of targeted RRR cuts will be positive for small and medium-sized enterprises that produce architectural emulsions, or for architectural coatings downstream of the terminal, but it will take time to test how big the impact is.
    Focus on the market performance of this year's Gold Nine Silver Ten.
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