March LPR (Loan Market Quote Rate) was announced as scheduled. On March 21, the National Interbank Funding Center authorized by the People’s Bank of China announced that on March 21, 2022, LPR): 3.7% for 1-year term and 4.6% for 5-year term or more, both terms remain the same as the previous month. Consistent.
The LPR remained unchanged, in line with market expectations. Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, analyzed that on the one hand, the MLF interest rate, which is the anchor of LPR, remained unchanged, and on the other hand, the macroeconomic data from January to February performed well. Combining the financial data in January and February, the financing of the real economy is not weak, the monetary environment remains moderate, and the central bank maintains its composure. It is expected to wait for further guidance from the data.
A reporter from Beijing Business Daily noticed that on March 15, the central bank operated a reverse repurchase of 10 billion yuan and an excess of 200 billion yuan in MLF, and the winning rates were 2.1% and 2.85%, respectively, the same as before. In addition, the LPR has remained unchanged at 3.7% for the one-year period and 4.6% for the five-year period in the past two months. After the decline in January this year, the two remained unchanged for the second consecutive month.
“The MLF interest rate and the addition points constituted by LPR have not met the conditions for decline.” From the perspective of the reason, Wen Bin, chief researcher of China Minsheng Bank, also pointed out that the policy interest rate has not been lowered, indicating that the LPR quotation this month is likely to remain unchanged. In addition, since the beginning of the year, the bank has continued to increase its credit supply to reduce the financing cost of the real economy. In the absence of a reduction in the reserve requirement ratio and interest rate this month, the bank was constrained by the cost of capital and failed to achieve the target of reducing the spread.
Wen Bin further pointed out that from an internal point of view, the LPR quotation is flat, which reflects that the monetary policy is prudent and neutral and maintains strategic focus. The central bank maintains a reasonably sufficient market liquidity through the combination of reverse repurchase + MLF. The total financial data of the first two months reflects the continuous increase in financial support for the real economy. However, the new credit and social financing in February were lower than expected, reflecting that the effective demand was still weak, the economic trend needs to be further confirmed, and policy support must be taken according to the actual situation. Therefore, there is some rationale for the policy rate and LPR to remain unchanged this month.
From an external point of view, Wen Bin said that the Fed raised interest rates and raised the target federal funds rate by 25 basis points to a range of 0.25%-0.5%, which was basically in line with expectations. At present, the yield spread between China and the United States 10-year Treasury bond has narrowed to more than 60 basis points, which may be one of the reasons why the interest rate has not been cut this month. However, on the whole, the Fed’s 25 basis points increase in interest rates has relatively limited constraints on my country’s monetary policy. .
From the current point of view, LPR remains stable and has a neutral impact on the market. Zhou Maohua pointed out that, on the one hand, the LPR remained unchanged and did not change the central bank’s more active policy orientation. The prudent monetary policy was precise and flexible to deal with the difficulties faced by the real economy, and the strength to support the real economy has not weakened; on the other hand, market liquidity remained reasonable. Abundant. The fundamentals and policy outlook continue to remain friendly to the market.
As put forward in this year’s government work report, “promote financial institutions to reduce actual loan interest rates and reduce fees”, which also means that although the LPR remains unchanged this month, banks will continue to increase financing through various channels in accordance with relevant policy requirements. With the support of the real economy, the actual financing cost has been stabilized with some decline.
As for the impact on the real estate market, Zhang Dawei, chief analyst of Centaline Real Estate, pointed out that various easing expectations for real estate have appeared frequently recently, but there are not many substantive favorable policies. Therefore, the market is expecting that the recent 5-year LPR can be fine-tuned, but it has not happened. With the impact of the epidemic, it is possible that the rate of market growth will slow down. Overall, home buyers in the current market are looking forward to seeing more policies to reduce down payments and lower interest rates. .
It should be noted that the Finance Committee meeting held on March 16 emphasized that to effectively revive the economy in the first quarter, monetary policy should take the initiative to respond, and new loans should maintain moderate growth. From the perspective of the industry, the meeting released full determination to stabilize growth, stabilized expectations in a very timely manner, and boosted confidence. The probability of future RRR cuts and interest rate cuts is increasing.
Regarding the follow-up trend of the currency market, Wen Bin believes that in the future, a prudent monetary policy will continue to increase support for the real economy, give full play to the functions of aggregate and structural policies, and strengthen inter- and counter-cyclical adjustments. There is still room for interest rate cuts and RRR cuts. It is expected that monetary policy will adhere to self-centered and proactive actions. According to changes in the situation and the needs of the real economy, policies that are conducive to stabilizing growth such as interest rate cuts and RRR cuts will be implemented in a timely manner, and various risks will be well dealt with. shocks to ensure that the economy operates within a reasonable range.
Zhou Maohua also said that it is expected that the follow-up RRR cuts, interest rate cuts and other tools are still in the toolbox. From the perspective of the trend, domestic demand is in the recovery stage, and some domestic enterprises still face considerable challenges. Economic financing cost pressure will increase.
Beijing Business Daily reporter Liu SihongReturn to Sohu, see more
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