SMM8: this week, the central bank authorized the national interbank lending center to announce the quoted interest rate of the loan market (LPR), of which the one-year LPR is 3.85% and the LPR for more than five years is 4.65%. All remain the same as the previous period. We note that since the biggest monthly decline in April, one-year and more-than-five-year LPR have been on hold for five consecutive periods.
It is understood that the LPR quotation has not been adjusted for many months, which is consistent with the previous MLF interest rate reduction, which is the performance of monetary policy adhering to a sound tone. With the further release of the potential of LPR reform to push down lending rates, corporate lending rates are expected to fall further in the future.
Some experts said that judging from the current situation, the internal and external economic and financial situation is still complex and grim, and there are still many uncertain and unstable factors. Under the background of promoting the decline of comprehensive financing costs of enterprises, the future LPR adjustment needs to match the situation of economic recovery.
In August 2019, the central bank decided to reform and improve the formation mechanism of LPR, and the new LPR quotation was updated every month. The reformed LPR, affects more than just personal housing loans. As an important step in the market-oriented reform of interest rate, LPR will promote the healthy development of China's financial market in a wider scope and at a deeper level.
Wen Bin, chief researcher of China Minsheng Bank, believes that in the next stage, monetary policy will be more focused on precision-oriented, mainly through open market operations and MLF to stabilize the liquidity of the banking system. As 1.5 trillion yuan of interest is still in progress to the real economy, of which the interest rate reduction achieved by lowering the interest rate will reach 930 billion yuan, deducting 470 billion yuan from the interest rate reduction achieved in the previous seven months, and will continue to reduce the burden by reducing interest rates by 460 billion yuan in the next five months, although the LPR will remain unchanged this month, the lending rates for real enterprises will remain on a downward trend.
Wang Qing, chief macro analyst at Oriental Jincheng, said that the LPR quotation has remained unchanged for five consecutive months, the fundamental reason is that the macro-economy has entered a relatively rapid repair process, the aggregate control represented by interest rate and reserve reduction is no longer increased, and monetary policy pays more attention to striking a balance between stable growth and risk prevention.
Founder Securities Chief Economist Color believes that in the context of normal monetary policy, the central bank's main means to alleviate the long-term liquidity tension is to continue to do MLF, in excess and accompanied by regular short-term liquidity regulation in the form of reverse repurchase. Under the condition that the economic fundamentals of our country continue to improve, there is basically no possibility of cutting reserve requirements and interest rates before the end of the year.