On the same day, the central bank announced that today is the second time to adjust the deposit reserve ratio of urban commercial banks operating only in provincial administrative regions by 1 percentage point, releasing about 40 billion yuan of long-term funds. At the same time, carry out medium-term lending facility (MLF) operation of 200 billion yuan. After the peak of the hedging tax period and other factors, the total liquidity of the banking system is at a reasonable and sufficient level, and the reverse repurchase operation will not be carried out on that day.
For the market, after the unexpected interest rate cut of MLF at the beginning of the month, the central bank made another new MLF, which exceeded market expectations. The quotation of dr001 on the morning of the 15th was about 2.69%, which was the same as the previous day. The 200 billion MLF + 40 billion drop also releases three signals:
1. Continue to maintain the loose monetary policy orientation
With the arrival of the mid month tax payment time, the total liquidity of the banking system has been tightened, and Shibor overnight / 7 days and dr001 / dr007 have significantly increased. It can be seen from the analysis that the upward trend of fund interest rate is related to the large scale of funds in transit of double 11, the approaching tax payment period in the middle of the month, market expectation and other factors.
Therefore, on November 15, 200 billion MLF + 40 billion yuan was reduced to quasi rapid aid, aiming to maintain stable capital and maintain reasonable and sufficient liquidity.
The previous day, on November 14, the data released by the National Bureau of statistics showed that the growth rate of consumption and investment at the demand end slowed down; the growth rate of industrial added value at the production end also fell, continuing the characteristics of high at the end of the quarter and falling at the beginning of the quarter, and the downward pressure on the economy increased.
At the beginning of this month, after the unexpected interest rate cut of MLF reflected the first goal of stable growth, the new MLF was put into medium and long-term liquidity again, and the volume price coordination was further relaxed.
2. Support small and medium-sized banks with targeted reduction
This time, about 40 billion yuan of capital was released for the city commercial banks operating only in the provincial administrative regions by reducing the deposit reserve ratio by 0.5 percentage point, which is the last round of policy implementation after the announcement of the reduction of the reserve ratio in September, and is within the market expectation.
Mingming, chief fixed income analyst of CITIC Securities, said that the recent interbank deposit certificate interest rate rose rapidly to the level before and after the credit risk event of small and medium-sized banks in May, reflecting the increasing pressure on the liability side of banks. On the other hand, it is also conducive to promoting the city commercial banks serving the grass-roots level to increase their support for small and micro enterprises and private enterprises.
3. Normalize the operation in the middle of MLF and strengthen the role of LPR anchor
Capital trader of a city commercial bank in Southwest China said that the current market liquidity is good, and the new MLF should have other intentions.
In the absence of maturity of MLF, the central bank created MLF twice in October and mid November. On the one hand, it carried out medium and long-term liquidity investment and hedging tax payment, on the other hand, it increased the scale and frequency of MLF operation to strengthen the role of LPR anchor.
In August this year, the central bank carried out the reform of LPR quotation mechanism: after the reform, LPR took MLF as a reference and loan interest rate anchored LPR. Compared with reverse repo, MLF is not used frequently. Previously, reverse repo was almost a normal operation, but MLF was only operated at special points such as the maturity of MLF. After anchoring MLF by LPR, the role of MLF will be strengthened, and the operation frequency of MLF will be increased correspondingly. The new MLF for two consecutive months means that the operation of MLF will be normalized in the middle of the year.
At present, 1-year LPR varieties are 4.2% and more than 5-year LPR varieties are 4.85%. According to the arrangement, LPR will make the fourth quotation on November 20.
The level of LPR depends on the result of the banks quotation, but the decrease of MLF interest rate reduces the capital cost of the bank, so the decrease of MLF interest rate at the beginning of November will drive the LPR down by 5 basis points, thus reducing the financing cost of the real economy. Color, associate professor of Applied Economics, Guanghua School of management, Peking University.
Source: responsible editor of 21st century economic report: Wang Xiaowu NF