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[concern] Macroeconomic better-than-expected repair LPR has not changed for three months in a row
Jul 20,2020 10:10CST
The new LPR offer is released today, with an interest rate of 3.85% in China's one-year loan market and an expected 3.85%, with a current value of 3.85%. China's five-year loan market quoted interest rate 4.65%, expected 4.65%, the current value of 4.65%.
The content below was translated by Tencent automatically for reference.

SMM7 March 20: today's new LPR offer, China's one-year loan market quoted interest rate of 3.85%, expected 3.85%, the current value of 3.85%. China's five-year loan market quoted interest rate 4.65%, expected 4.65%, the current value of 4.65%. It is worth noting that the LPR quotation has been "standing still" for three months in a row.

Previous statistics bureau data showed that GDP growth in the second quarter was 3.2%. In the first half of the year, China's economy fell first and then rose, economic growth changed from negative to positive in the second quarter, the main indicators recovered, the economic operation recovered steadily, and market expectations generally improved. In the second quarter, the production index of industrial production and service industry returned to positive successively compared with the same period last year, and the property market and automobile market were obviously picking up. The process of macroeconomic repair is relatively fast, promoting the central bank to adjust the pace of monetary policy to the direction of marginal tightening.

Moreover, the medium-term lending convenience (MLF) operating rate, which is the main reference for LPR quotations, also remained unchanged this month. On July 15, the central bank announced that the 400 billion yuan MLF operation was carried out on that day, which is a continuation of two MLF maturities this month and a targeted medium-term loan to facilitate (TMLF) maturity. The interest rate for the central bank's MLF operation is 2.95%, the same as in June. At the same time, the MLF winning interest rate remained unchanged for three months in a row. Under the condition that the operating interest rate of MLF remains unchanged this month, it is difficult to change the quotation of LPR in July.

For the late interest rate wind direction, the overall market has not maintained a loose state:

Soochow Securities Research News believes that in the second half of the year, the reform of LPR will continue to be deepened, real interest rates on loans will continue to decline, the position of monetary policy is still steady, and monetary policy is more flexible and moderate, with emphasis on the word "moderate". It is necessary not only to have an appropriate total amount, to guide the release of credit to match the pace of economic recovery, but also to moderate prices, to guide further reduction in financing costs and to yield benefits to the real economy.

Wang Qing, chief macro analyst at Oriental Jincheng, predicts that in order to implement the 1.5 trillion yuan concession target of the financial system for the whole year, the downward rate of LPR quotations will accelerate in the second half of the year, which means that general corporate lending rates will fall more sharply in the same period.

Founder Securities Chief Economist Color believes that as the economy continues to rebound, the operating style of monetary policy will remain stable, in a strong market, short-term liquidity may also continue to be cautious.

Citic Securities clearly believes that although the current total amount of excess reserves among banks is relatively sufficient, the pressure on the liquidity gap in July is greater, and the central bank may restart reserve reduction operations to support future credit lending; at the same time, the policy goal of "promoting the financial system to reasonably transfer 1.5 trillion yuan of profits to all kinds of enterprises throughout the year" also requires a reduction in future policy interest rates to a certain extent.

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