Original title: MLF incremental sequel stabilizes market expectations and sends a clear credit signal
Securities Times reporter Wang Junhui
On February 15, the People’s Bank of China launched a 300 billion yuan medium-term lending facility (MLF) operation (including the renewal of the MLF expiry on February 18) and a 10 billion yuan open market reverse repurchase operation. The MLF expiry this month is 200 billion yuan, and the central bank’s MLF operation is an incremental sequel. At the same time, the MLF operating rate and the 7-day reverse repurchase rate were both the same as the previous period.
Since the second half of last year, the global epidemic, economic and policy outlook have been complicated, and the recent volatility in overseas markets has also exacerbated the uncertainty of the global economic outlook. Steady growth has become the top priority of economic work this year. A timely and appropriate increase in medium-term capital supply will help stabilize the market’s expectations of the economic outlook and help stabilize market sentiment. In the current situation of abundant liquidity, the central bank still chooses to continue to make MLF incrementally, sending a clear signal of easing credit to the market.
After the comprehensive RRR cut in December 2021 and the MLF interest rate cut in January 2022, the market interest rate continued to decline. Among them, the current representative one-year commercial bank (AAA grade) interbank certificate of deposit yield to maturity has dropped to 2.4 %~2.5% range, significantly lower than the MLF operating interest rate level. At this time, an appropriate increase in liquidity supply reflects the consideration of monetary policy to make efforts to stabilize market expectations.
Judging from the operation price, the interest rate of the MLF operation remains unchanged, which is in line with market expectations. The recently released financial data for January showed strong performance. The supply and demand of financing in the real economy were booming. In January, RMB loans increased by 3.98 trillion yuan, and social financing was increased by 6.17 trillion yuan. Both new credit and social financing hit a single-month historical peak. In addition, a comprehensive RRR cut was implemented at the end of last year and the MLF interest rate was cut by 10BP last month. The central bank needs some time to wait and see the effect of the policy.
Since the end of last year, the central bank has made many public statements on monetary policy, not only in terms of volume and price, but also in terms of structural monetary policy. In general, a prudent monetary policy should be flexible and appropriate, increase cross-cycle adjustment, give full play to the dual functions of monetary policy tools in terms of total volume and structure, and focus on making full, precise, and forward-looking efforts, and neither It also meets the reasonable and effective financing needs of the real economy, and strives to increase financial support for key areas and weak links, so as to achieve a better combination of stable total volume and excellent structure. These points were once again reflected in the “China Monetary Policy Implementation Report for the Fourth Quarter of 2021” released recently.
It is worth noting that the recent interest rate hikes by major overseas central banks have increased, and the market is worried that this will hinder my country’s credit easing process. In this regard, the central bank has repeatedly emphasized that my country’s monetary policy will enhance its autonomy and independence. The current monetary policy is moving from the stage of monetary advance to the stage of escorting “easy credit”, emphasizing stable growth, and there is still room for marginal easing. The specific operation will mainly depend on whether there is a risk of deviating from a reasonable range in the operation of the domestic economy, as well as the real estate and other markets. Depends on risk resolution.
At present, the unchanged MLF operating interest rate also means that the pricing basis of the LPR (loan market quotation rate) quotation in February will likely remain unchanged. constant.
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Responsible editor: Qi Qiqi