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Great Wall Macro | Policy Interest Rate Cut as Scheduled – Comments on Rate Cut_Data_Real Estate_Finance

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Great Wall Macro | Policy Interest Rate Cut as Scheduled – Comments on Rate Cut_Data_Real Estate_Finance

Original title: Great Wall Macro | Policy Rate Cut as Scheduled – Comments on Rate Cut

Jiang Fei/Text

core point

event

On August 15, the People’s Bank of China launched a 400 billion yuan medium-term lending facility (MLF) operation and a 2 billion yuan open market reverse repurchase operation. 2.85% down to 2.75%, reverse repurchase down from 2.10% to 2.00%.

gist

First of all, the financial data in July shows that although the M1 and M2 data continued to rise year-on-year, the total amount and structure of new loans were not good, and the impulse of bill financing reappeared. Judging from the credit overdraft in June, the role of the current financial support financial data is still prominent, and it is difficult to achieve credit relief in the short term.

Secondly, the real estate sales data continued to decline after a short-term recovery. The real estate industry is still bottoming out and has not improved significantly.It reflects that the foundation for my country’s economic recovery is not stable at present, and the epidemic is disturbed more frequently. In the future, it is necessary to continue to provide support and force through fiscal, monetary and other policies. Since the current fiscal force is obviously pre-emptive, and the intensity is relatively large, and the market interest rate is already lower than the policy interest rate at this stage, it is natural to cut interest rates in monetary policy.

Finally, in “”, we had expected a 50BP rate cut this year, and in the May rate cut review report “”, we also mentioned that by the end of May, the 5-year LPR had cut interest rates by 40BP (5BP in January, 15BP in May, plus 5 On the 15th, the real estate differentiation was reduced by 20BP), soThe current MLF cut is in line with or even exceeded our expectations. With the MLF cut, the LPR rate on the 20th is expected to fall further.

1

The reason for the central bank’s rate cut

1.1 Poor credit and social financing data

On August 12, the People’s Bank of China announced the financial data for July.On the one hand, it can be seen from the credit data that the total amount and structure are lower than expected: New RMB loans in July were 679 billion yuan, compared with 1,083.2 billion yuan in the same period last year, a year-on-year decrease of 404.2 billion yuan. Among them, the added value of medium- and long-term loans to residents and medium- and long-term loans to enterprises was 148.6 billion yuan and 345.9 billion yuan, respectively. The value-added decreased significantly both compared with the previous month and compared with the same period last year.

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On the other hand, it can also be seen from the social financing data that first, under the overdraft of the high increase in social financing in June, social financing fell sharply in July, with a monthly new increase of only 756.1 billion yuan, far lower than the previous Second, the proportion of government bond financing supporting social financing has been increasing for several consecutive months, reaching the highest value of 52.88% in July. difficult to sustain; third,In recent months, the growth rate of social financing has been lower than the growth rate of M2, mainly due to the fact that corporate deposits formed by tax rebates are included in M2 but not in social financing, reflecting the current fiscal effect on financial data. It seems difficult to find.

1.2 Property sales are still declining

Although the current real estate sales in the 30 large and medium-sized cities showed a brief recovery in June, they began to decline again in July and August.We believe that the main reasons may be three-fold:First, the epidemic disturbanceSince the beginning of July, due to the relaxation of travel restrictions in many places and the popularity of domestic travel, local epidemics have begun to break out in many places. Especially since August, the number of confirmed cases of the epidemic has increased significantly, which has suppressed real estate demand to a certain extent;Second, the current residents’ willingness to buy houses is not high, and the high transaction volume in June may also overdraft the transaction volume.Third, the implementation of the “guaranteed building handover” plan was lagging behind, which made residents have a strong wait-and-see attitude towards purchasing new houses, which caused the sales of commercial housing, especially the transaction area of ​​commercial housing in second-tier and third-tier cities, to continue to decline.

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On May 20 this year, the central bank lowered the 5-year LPR interest rate by 15 basis points, and the interest rate dropped from 4.6% to 4.45%. On May 15, the People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly notified that the lower limit of the interest rate for first home buyers should be adjusted to no less than 20 basis points of the benchmark, making the current interest rate for first-time homes at 4.25%. Although the first set of loan interest rates have fallen, the current June SHIBOR interest rate has dropped from 2.6% to 1.76% since the beginning of this year. Compared with the short-term June SHIBOR interest rate, the 5-year LPR rate is still slow.

1.3 The policy rate is higher than the market rate

It can be seen from the current monetary policy that since the rate cut in May this year, the policy interest rate has remained unchanged for two consecutive months, but during this period, market interest rates (such as the 7-day interbank pledged repo rate, the 6-month SHIBOR interest rate, etc.) Continuing to decline, even below the policy rate,Shows the market’s tendency to deviate from the policy rate. It can be said that short-term interest rates did not rise but fell. The main reason may be the lack of domestic demand to repair the kinetic energy and the low utility of credit output. Combining with a number of indicators, we expect short-term market interest rates to continue to decline.In addition, we have also repeatedly emphasized in reports such as “The Time to Cut Interest Rates”, “July Financial Data Review” and other reports. hand.

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2

Summarize

First of all, the financial data in July shows that although the M1 and M2 data continued to rise year-on-year, the total amount and structure of new loans were not good, and the impulse of bill financing reappeared. Judging from the credit overdraft in June, the role of the current financial support financial data is still prominent, and it is difficult to achieve credit relief in the short term.

Secondly, the real estate sales data continued to decline after a short-term recovery. The real estate industry is still bottoming out and has not improved significantly. This reflects that the foundation for my country’s economic recovery is not yet solid, and the epidemic is more frequently disturbed. Follow-up needs to continue to pass through fiscal, monetary, etc. Policies provide support and strength together. Since the current fiscal force is obviously pre-emptive, and the intensity is relatively large, and the market interest rate has been lower than the policy interest rate at this stage, it is natural to force the monetary policy to cut interest rates.

Finally, we predicted a 50BP rate cut this year in the “Expected to be a big rate cut this year – 20220124 Weekly Report”, and in the May Rate Cut Review Report “”, it was also mentioned that by the end of May, the 5-year LPR had cut interest rates by 40BP (1 May 5BP, May 15BP, plus the real estate differential reduction of 20BP on May 15), so the current MLF reduction fully meets or even exceeds our expectations. With the MLF reduction, it is expected that the LPR interest rate on the 20th will be further. decline.

risk warning

Domestic macroeconomic policies were lower than expected; fiscal policy was lower than expected; monetary policy was lower than expected; the new crown epidemic broke out again.Return to Sohu, see more

Editor:

Disclaimer: The opinions of this article only represent the author himself, Sohu is an information publishing platform, and Sohu only provides information storage space services.

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