Look back at this discussion. Many people rejected BSIP42 altogether. Feeding reform did not achieve the desired goal, or perhaps accelerated the market contraction. This is not the inevitable result of the feed reform. The biggest problem is that CNY cannot be allowed to depreciate during the downturn of the market. In fact, if CNY is allowed to depreciate by 10%, there will be no such bad consequences. In other words, if CNY is allowed to keep its feed price unchanged at less than 10% depreciation, it may succeed.
An increase in feeding prices is equivalent to a simultaneous reduction in MSSR and MCR, which can significantly reduce market burst orders during market declines. As for risk release, releasing risk is actually putting more pressure on the already weak downstream market, which makes it worse. The degree of risk release should be without the occurrence of burst warehouse receipt pressure plate.
Risk accumulation should be prevented during peacetime and market rise, so players'leverage should be reduced, because high leverage will undoubtedly accumulate more risks. This fundamental precaution must gradually improve MCR, as long as the market does not accumulate a large amount of risk during the period of market rise, there is no need to digest burst warehouse receipts during the period of market downturn.
MCR must be reformed, but the direction of reform is to continuously improve MCR, not to adjust between 1.25 and 2. It is suggested that a long-term mechanism should be established to gradually increase MCR, at least in the range of 3-5 or more. At the same time, we must keep the feeding price rising.