(Yicai Global) Oct. 4 -- China's latest reserve requirement ratio (RRR) cut does not seek to ease short-term liquidity pressure, but is rather part of government structural adjustment efforts, concluded China International Capital Corp. [HK:3908] (CICC), a major investment bank. 

China's central bank announced an RRR cut of 0.5 to 1.5 percentage points from next year if commercial banks' annual outstanding or new loans for small and micro-enterprises, startups and agricultural production reach certain requirements. The central bank also explained that the RRR cut does not change the overall monetary policy stance.

The objective of the RRR cut is not to "replenish short-term market liquidity, though it will likely boost market sentiment over liquidity conditions and lift banks' profitability," CICC noted in this latest report.

The reduction may release more than USD120 billion (CNY800 billion) of liquidity into the economy, CICC projected.

The probability of another RRR cut in the near term is relatively low, as CICC expects resilient growth and faster consumer price increases in the fourth quarter, the report also advised.

China's GDP grew 6.9 percent in the first half, well above the government's targeted growth of around 6.5 percent for the whole year.