Daily Economic News 2024-02-18 12:15:31
On February 18, the central bank announced on its website that it would launch a 105 billion yuan open market reverse repurchase operation and a 500 billion yuan medium-term lending facility (MLF) operation today, with interest rates maintained at 1.8% and 2.5% respectively. So far, the central bank has incrementally renewed MLF for 15 consecutive months.
Every reporter Xiao Shiqing Every editor Ma Ziqing
On February 18, the central bank announced on its website that in order to maintain reasonable and sufficient liquidity in the banking system, it will launch a 105 billion yuan open market reverse repurchase operation and a 500 billion yuan medium-term lending facility (MLF) operation today, with interest rates maintained at 1.8% and 2.5% respectively. .
Image source: Central Bank website
Since the MLF maturity size this month is 499 billion yuan, and the central bank has renewed it with 500 billion yuan, the MLF operation this month is actually a small incremental and affordable renewal. The reporter noted that as of now, the central bank has incrementally renewed MLF for 15 consecutive months.
Dong Ximiao, chief researcher of China Merchants Union, told reporters that the increase in operating volume this month was flat, basically in line with market expectations. After the comprehensive reduction in reserve requirements in the first two months, it once again sent a positive signal that monetary policy will intensify efforts to stabilize growth and promote development, which will help To further stabilize market confidence and boost social expectations.
Incremental sequel “Spicy Noodles” 500 billion yuan
This month, the central bank once again continued the trend of incremental financing. Since the maturity amount of MLF in February was 499 billion yuan, the central bank implemented an operation of 500 billion yuan, and the central bank made a net investment of 1 billion yuan. So far, the central bank has incrementally renewed MLF for 15 consecutive months.
Dong Ximiao believes that,From a quantitative perspective, this is the 15th consecutive month that the central bank has exceeded the MLF quota.. On February 5, the comprehensive RRR cut of 0.5 percentage points has released more than 1 trillion yuan of long-term liquidity. Coupled with this month’s MLF excess renewal, the central bank continues to inject liquidity into the market, which can effectively supplement the recent market funding gap and ensure the Spring Festival. The liquidity in the aftermarket is reasonable and sufficient, and the financial market operates smoothly.
Wang Qing, chief macro analyst of Oriental Jincheng, believes: “The increase in MLF volume and renewal in February is in line with market expectations and is also a signal of the continued efforts of the policy to stabilize growth.”
Wang Qing further explained that the first quarter of 2024 has entered a critical stage of stable growth. The increase in MLF volume will help increase the medium and long-term liquidity of the banking system, support credit growth and government and corporate bond issuance, and also encourage banks and other financial institutions. In accordance with the principles of marketization and rule of law, we actively participate in resolving local debt risks through extension, borrowing new loans to repay old loans, and replacement.
“Thus, although the RRR cut is implemented this month and the amount of funds released exceeds 1 trillion, considering that credit and social financing in January exceeded expectations, and government bond issuance is expected to accelerate in the future, new credit will still be at a relatively high level. , therefore banks’ demand for MLF operations has increased. At the same time, the additional MLF operation itself is also releasing a signal that the policy side will step up efforts to stabilize growth, reflecting the overall strength of monetary policy.” Wang Qing said.
Expert: It is still more likely that MLF interest rates will be lowered in the short term
The MLF interest rate remained at 2.5% this month, unchanged for six consecutive months. Wang Qing pointed out that the MLF operating interest rate continued to be “on hold” in February, which may be related to factors such as the implementation of the required reserve ratio reduction that month, which is expected to lead to a separate reduction in LPR quotations. However, the current low price level has pushed up the actual loan interest rates of enterprises and residents, and the macroeconomic climate needs to be improved. Lowering the MLF operating interest rate is still one of the important policy options.
Image source: Central Bank website
Wang Qing said that based on the current economic and price trends, we judge that it is still more likely that the MLF interest rate will be lowered in the short term.first,This will send a clear signal that policies to stabilize growth will be implemented in advance, boost market confidence, and promote macroeconomic stability and upward momentum.Secondly,The reduction in MLF interest rates will lead to coordinated adjustments in LPR quotations, effectively reducing the financing costs of the real economy and providing more favorable conditions for resolving local debt risks.at last,This will open up space to guide residential mortgage interest rates downward, thereby promoting the real estate industry to achieve a soft landing as soon as possible.
Dong Ximiao believes that the reverse repurchase and MLF winning bid rates are 1.8% and 2.5% respectively, both unchanged from last month. Although the loan prime rate (LPR) is calculated by adding points to the 1-year MLF interest rate, the MLF interest rate has not changed, and the probability of LPR remaining unchanged is relatively high. However, combined with the signals released by the central bank’s previous external stance, LPR may still fall on February 20. From a bank’s perspective, the deposit interest rate has been lowered several times and the reserve requirement ratio has been reduced across the board. The cost of bank funds has been reduced, and there is some room for LPR reduction points;Historically, there have been three precedents where the MLF interest rate remained unchanged but the LPR fell.。
Dong Ximiao said that since the reform in 2019, the decline in LPR over 5 years is 15 basis points smaller than that of 1-year LPR, and the LPR over 5 years is more likely to decline in the near future. It is expected that under the cautious scenario, the 1-year LPR will remain unchanged this month, and the LPR over 5 years will decrease by 5 basis points; under the optimistic scenario, the 1-year LPR and the 5-year LPR will decrease by 5 basis points and 10 basis points respectively this month. . The LPR of more than 5 years is the pricing benchmark for personal housing loans and medium and long-term loans to enterprises and institutions. If the LPR of more than 5 years decreases, it will further reduce the interest expenses of residential mortgage loans, promote the stable development of the real estate market, and more effectively stimulate the financing needs of enterprises and institutions. .
Cover photo source: Photo by Mijing reporter Peng Fei
2024-02-18 04:15:00
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