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Original title: LPR is flat for 3 consecutive months, but bank lending rates have room to cut
Experts predict that there is a high probability that the LPR will be cut by 10 to 15 basis points in May and June
Our reporter Liu Qi
On April 20, the latest loan market quoted rate (LPR) was released. According to the announcement by the National Interbank Funding Center authorized by the People’s Bank of China (hereinafter referred to as the “Central Bank”), on April 20, 2022, the one-year LPR was 3.7%, and the 5-year LPR was 4.6%. The LPRs of the two varieties were the same as last month. As of this quotation, the LPRs have remained unchanged for 3 consecutive months.
In fact, after the central bank announced the RRR cut on April 15, the market is particularly concerned about whether the LPR will be adjusted this month. Regarding the LPR remaining unchanged in this issue, many analysts said in an interview with a reporter from Securities Daily that the reduction in accuracy can indeed guide the decline of LPR to a certain extent, but the strength of this reduction is not enough to trigger the minimum adjustment step of LPR. long (5 basis points). Although the LPR remains unchanged, the corporate loan interest rate will continue to decline in the short term.
LPR remains unchanged in line with market expectations
The central bank launched the medium-term lending facility (MLF) interest rate on April 15 to remain unchanged, indicating that the LPR pricing basis has not changed, indicating that the current LPR is likely to maintain the previous value. However, the central bank announced on the same day that it will cut the RRR in an all-round way on April 25, triggering market discussions on whether the RRR cut may lead to a decline in LPR this month.
Minsheng BankWen Bin, chief researcher, said in an interview with the “Securities Daily” reporter that banks still have debt cost pressures. The RRR cut by 0.25 percentage points will be implemented on April 25, saving financial institutions 6.5 billion yuan in capital costs each year. Referring to past experience, the RRR cut twice last year by 0.5 percentage points each saved financial institutions a total of 28 billion yuan in capital costs each year, superimposed and optimized the deposit interest rate self-disciplined pricing formation mechanism, and introduced structural monetary policies such as re-lending, etc. The 1-year LPR fell 5 basis points in January, but the 5-year LPR remained unchanged. Recent moves such as RRR cuts have not yet allowed banks to reach the minimum step size of 5 basis points of spread pressure reduction, so the LPR remains unchanged.
“According to the law since the LPR quotation reform in 2019, two RRR cuts of 0.5 percentage points will trigger an interest rate cut. For example, after two RRR cuts in July and December in 2021, the one-year LPR quotation in December will be reduced by 5 points. A similar situation occurred in 2019. This time the RRR cut was less than 0.5 percentage points, and the number of consecutive cumulative times was only 1, so it is not unexpected that the LPR remained unchanged in April.” Wang Qing, chief macro analyst of Oriental Jincheng Speaking to the “Securities Daily” reporter.
Does not affect cost reduction for the real economy
In Wen Bin’s view, although the LPR quotation has not changed, the trend of continuing to make reasonable profits to the real economy and reducing comprehensive financing costs has not changed. From the perspective of “volume”, on April 15, the central bank issued an announcement to cut the reserve ratio, which will help to increase the amount of credit. 8 basis points lower for the month, helping to bail out the real economy. It is expected that the loan interest rate will continue to maintain a steady decline in the future, supporting industries severely affected by the epidemic, small and medium-sized enterprises, individual industrial and commercial households, etc. to tide over the difficulties and stabilize the economic fundamentals.
Wang Qing also believes that although the LPR quotation in April remains unchanged, the corporate loan interest rate will continue to decline in the short term. On the one hand, the recent “comprehensive RRR cuts + targeted RRR cuts” and the regulatory encouragement of small and medium-sized banks to lower the floating ceiling of deposit interest rates will save costs for banks to varying degrees. Under the guidance of supervision, this part of the cost reduction will be fully transmitted to the real economy. On the other hand, the central bank has stepped up the implementation of structural monetary policy tools to provide banks with more low-cost funds through re-lending, thereby guiding banks to provide small and micro enterprises, green development and technology with low interest rates. Provide credit in key areas such as innovation.
On April 18, the central bank announced that it will increase the support for structural monetary policy tools such as re-lending, make good use of the re-lending to support agriculture and small-scale enterprises and two carbon reduction tools, accelerate the 100 billion yuan re-lending in the field of transportation and logistics, and create 2,000. 100 million yuan in technological innovation re-loans and 40 billion yuan in inclusive pension re-loans are expected to drive an additional 1 trillion yuan in loans from financial institutions.
Policies shift to structural support
Looking forward to the later period, Wang Qing believes that according to the current macroeconomic situation and real estate operation conditions under the current epidemic situation, it is possible to implement a comprehensive RRR cut again in the second quarter. In the downward trend, money market interest rates will also remain low. It is expected that in the next May and June, there is a high probability that the LPR will be cut by 10 to 15 basis points.
From the point of view of the follow-up monetary policy,CITIC SecuritiesIn an interview with a reporter from Securities Daily, Chief Economist Mingming said that a number of loose monetary policies have been implemented recently, and the room for further easing has narrowed. However, in the context of the spread of the epidemic dragging down the process of stabilizing growth and easing credit, it is expected that the easing orientation of monetary policy will not change, but the follow-up monetary policy may gradually turn to structural support.
It is worth mentioning that the central bank and the China Banking and Insurance Regulatory Commission jointly held a symposium on financial support for the real economy on April 19. The meeting pointed out that “we should make full use of various financial policies and take the initiative to serve the real economy.” At the same time, it is also proposed that “to give full play to the effectiveness of a number of structural monetary policy tools, do a good job in the connection between government, bank and enterprise, and release policy dividends as soon as possible”.
Wen Bin believes that in the future, monetary policy is expected to continue to adhere to the principle of stability, focusing on me, taking into account both internal and external, giving full play to the dual functions of total volume and structure, increasing support for the real economy, and stabilizing the economic fundamentals. The current internal and external situation is becoming more complex and changeable. In the future, imported inflation pressure will increase. The Fed’s tightening of monetary policy will cause the Sino-US interest rate gap to narrow or even be inverted. It may also trigger shocks such as increased volatility in the global financial market. All these need to be implemented in the policy implementation Overall consideration and coordination and balance in the process.
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Responsible editor: Zhao Siyuan