The abundance of liquidity is intuitively reflected in the trend of market capital interest rates. Visual China chart
[ 随着此次MLF利率保持不变，再叠加近期银行边际资金成本变化和信贷市场走势，业内多数观点分析本月LPR（贷款市场报价利率）大概率将保持不变。不过，在银行边际资金成本下降的情况下，预计银行下调1年期LPR报价的动能正在累积。 ]
Compared with the shrinking sequel in August, the MLF (Mid-term Lending Facility) resumed the same sequel in September, which surprised the market.
On September 15, the central bank issued an announcement stating that in order to maintain reasonable liquidity in the banking system, it carried out 600 billion MLF operations (including the continuation of the MLF expiration on September 15) and 10 billion reverse repurchase operations on the same day.
From the perspective of MLF operation scale, considering that the MLF maturity amount in the current month is 600 billion yuan, this month is a continuation of the same amount, and the operation scale is slightly higher than market expectations. In addition, the operation interest rate is still 2.95%, which is lower than last month. It remains unchanged and has not changed for 18 consecutive months.
According to industry insiders, the MLF maturity scale in September is relatively large, and the central bank has implemented an equivalent sequel, indicating that the policy supports moderately loose bank liquidity in the medium and long term. The bottom picks up.
Zhang Xu, chief fixed-income analyst at Everbright Securities, also told reporters that in the current market environment with abundant liquidity, the central bank is still conducting large-scale MLF operations, indicating that it fully meets the liquidity needs of financial institutions and maintains reasonable and sufficient liquidity. orientation.
High-stakes MLF equivalent sequel
As market discussions on RRR cuts intensify, the operation of the MLF in September has attracted much attention. Judging from the recent MLF operations, the central bank has adopted a reduction in volume in July and August. Moreover, the MLF maturity volume in September was 600 billion yuan, which was the second highest level of the year after the previous month’s maturity volume of 700 billion yuan. In this context, most previous opinions in the industry expected that the MLF operation this month may continue to shrink. do.
According to the announcement of the central bank, the launch of 600 billion MLF this time is just a hedge against the maturity of the day, which is slightly higher than market expectations. Wang Qing, chief macro analyst at Oriental Jincheng, said that the high-volume sequel to the MLF this month indicates that the policy supports the current mid- to long-term liquidity in the banking system, which will help to further reduce the financing cost of the real economy and stabilize the growth of the financial system. Increased support.
Zhang Xu told reporters that the current 1-year AAA-level interbank certificate of deposit interest rate is around 2.68%, slightly lower than the MLF interest rate of 2.95%, reflecting from the side that the current banking system has ample liquidity. “Under such a market environment, the People’s Bank of China is still carrying out large-scale MLF operations, which shows that it fully meets the liquidity needs of financial institutions and maintains a reasonable and ample liquidity orientation.”
The abundance of liquidity is intuitively reflected in the trend of market capital interest rates. Recently, interest rates for short-end funds in the market have remained low. The latest data shows that on September 15th, Shibor (Shanghai Interbank Offered Rate) short-end varieties mostly declined, overnight varieties fell 15.9BP to 2.137%, 7-days fell 6.7BP to 2.213%, and 1-months rose 0.5. BP reported 2.344%.
In addition, since the National Standing Committee announced its RRR cut on July 7, interest rates in the mid-market have also fallen sharply. Among them, the monthly average of the 1-year commercial bank (AAA) interbank certificate of deposit yield to maturity in August fell to 2.66%, which was 9 basis points lower than the previous month, and was already below the mid-range policy rate (MLF rate).
Entering September, the “upside down” phenomenon of interbank deposit certificates and MLF continued, and the range remained basically stable. Wang Qing said that the sharp decline in the yield to maturity of interbank certificates of deposit will directly help promote the decline of banks’ marginal capital costs; in addition to the recent supervisory authorities “urging banks to transmit policy dividends to the real economy”, it is expected that corporate loan interest rates will decline since the second quarter. The momentum will continue. In the future, bank loans to the real economy will increase in volume and prices will decrease, and financial support for stable growth will increase.
However, from the previous financial data released by the central bank in August, credit demand continued to weaken. Data show that in August, RMB loans increased by 1.22 trillion yuan, which was 63.1 billion yuan less than the same period last year; the increase in social financing was 2.96 trillion yuan, 629.5 billion yuan less than the same period last year.
In Wang Qing’s view, despite the continued weakness of financial data in August, it mainly reflects the time lag effect. In the context of the central bank’s RRR cut in July, the monetary and credit situation analysis symposium held in August, and the recent addition of 300 billion yuan in refinancing to support small and micro enterprises, the signal of “wide credit” has become relatively clear. “We judge that by adding this high-volume MLF sequel, the’tight credit’ process since the beginning of the year is coming to an end, and it is expected to stabilize in September. The growth rate of credit, social financing and M2 in the fourth quarter will all enter a slight rebound process.”
Zhao Wei, chief economist of Kaiyuan Securities, believes that the continued shrinking of the credit environment to the return to expansion is often accompanied by increased steady growth and relaxation of real estate policies. However, in the current round of credit “shrinkage” phase, local debt supervision and real estate regulation and other policies are relatively strong, and the impact of lenient credit policies or focusing on structure on the credit environment still needs to be observed.
Lower probability of interest rate cuts during the year
While MLF continued to work in equal amounts, the operating interest rate remained unchanged, which further broke some of the interest rate cut expectations in the market.
There is a view that the MLF operating interest rate has not changed, indicating that the overall RRR cut in July is more of a targeted support measure for the real economy such as small and micro enterprises. The current monetary policy has not shifted to full easing, and the regulatory authorities are still focusing on stabilizing growth and preventing risks. Maintain a balance between controlling inflation.
In fact, the recent stability of short-end policy interest rates also indicates to a certain extent that MLF interest rates will remain unchanged. Recently, the central bank has carried out 7-day reverse repurchase operations every day, and the operating interest rate has always been maintained at 2.20%. Due to the relatively fixed linkage between the short-term policy interest rate and the medium-term policy interest rate, the unchanged MLF interest rate in September is also in line with expectations.
However, there are expectations in the current market for another RRR cut and even MLF rate cuts in the near future. In this regard, Zhang Xu told reporters that a RRR cut had just been implemented in July, and the central bank also stated that it would guide financial institutions to continue to use the RRR cut funds. Therefore, the probability of successive RRR cuts in the short term is very limited; the MLF rate cut is even less likely. So far, we have not observed the urgency and necessity of the MLF rate cut.
For example, from the perspective of the liquidity gap during the year, according to the calculations of CITIC Securities, if fiscal expenditures are accelerated to hedge against government bond issuance and the central bank’s open market operations to hedge funds expire, the liquidity gap in October will be greater than 500 billion yuan in other months of the year. The sex gap is small, and there may even be a liquidity surplus. Compared with historical levels, the liquidity gap during the year (including the assumption of central bank liquidity injection) was not large, and it was also lower than that in the first half of the year.
The Director of the Monetary Policy Department of the Central Bank Sun Guofeng also mentioned in the recent policy briefing of the State Council Information Office that “the People’s Bank of China has sufficient resources for the periodic disturbance of liquidity caused by factors such as fiscal revenues and expenditures and government bond issuance payments. The tools of the company are smoothed, and liquidity can be maintained reasonably and adequately. “The supply and demand of liquidity will maintain a basic balance in the next few months, and there will be no large gaps and large fluctuations.” From the perspective of industry insiders, the regulatory stance on the base currency gap has further reduced market expectations for RRR cuts.
Wang Qing said that the financial support for the real economy in the future will mainly depend on the macroeconomic trends affected by the evolution of the epidemic at home and abroad. Looking at the current point in time, the medium-term policy interest rate represented by the MLF operating interest rate is expected to remain unchanged, and it is unlikely that there will be a “double cut (reduced reserve rate + policy rate cut)” in the future.
On the one hand, the “scissors gap” between PPI and CPI in September hit a new high this year, and it will continue for some time in the future. This means that many mid- and downstream small and micro enterprises and other real economic business environments are under pressure, and monetary policy is needed to support them. As a result, the central bank may implement a RRR cut again in the fourth quarter and push the one-year LPR quotation down, which in turn will lead to a decline in corporate loan interest rates.
On the other hand, Wang Qing said that although the downward pressure on the economy will increase in the short term, under the background of fiscal force and macroeconomic policy fine-tuning towards stable growth, the economic operation at the end of this year and the beginning of the next year will fall outside of a reasonable range. Risks are controllable, and it is not necessary to release a strong signal of stabilizing growth through lowering the policy interest rate. It is expected that the domestic CPI in the fourth quarter will rise to the range of 2.0% to 2.5% year-on-year. Regulators need to stabilize inflation expectations, especially to prevent the transmission of high PPI growth to the CPI and control the overall inflation risk. In this context, it is more difficult to lower the policy interest rate.
With the current MLF interest rate remaining unchanged, coupled with recent changes in the bank’s marginal cost of funds and credit market trends, most opinions in the industry analyze this month’s LPR (loan market quote rate) with a high probability that it will remain unchanged. However, with banks’ marginal cost of funds falling, it is expected that the momentum for banks to lower their 1-year LPR quotations is accumulating. Return to Sohu to see more
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