On December 23, 2019, Li Keqiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, said during a visit to Chengdu that the state will further study and take various measures, such as reducing the standard and reducing the standard in a targeted way, refinancing and rediscount, to reduce the actual interest rate and the comprehensive financing cost, and to promote the obvious alleviation of the financing difficulty and high cost of small and micro enterprises.
On January 1, new years day, the central bank said it decided to reduce the reserve ratio of financial institutions by 0.5 percentage points (excluding financial companies, financial leasing companies and auto financing companies) on January 6, 2020. This reduction is a comprehensive one, reflecting counter cyclical regulation, releasing more than 800 billion yuan of long-term funds, effectively increasing the stable sources of funds for financial institutions to support the real economy, reducing the cost of funds for financial institutions to support the real economy, and directly supporting the real economy.
The central bank said that the reduction increased the sources of funds for financial institutions, that large banks should focus on services, that small and medium-sized banks should focus more on the main business, and that they should actively use the reduction funds to increase support for small and micro enterprises and private enterprises.
The reduction released more than 800 billion yuan of long-term funds, effectively increasing the stable sources of funds for financial institutions to support the real economy.
The person in charge of the central bank stressed that the reduction of the reserve to maintain a reasonable and sufficient liquidity is conducive to the realization of the growth of monetary credit and social financing scale in line with economic development, the creation of a suitable monetary and financial environment for high-quality development and supply side structural reform, and the use of market-oriented reform methods to dredge monetary policy transmission, which is conducive to stimulating the vitality of market entities and further giving play to the market in capital Decisive role in source allocation to support the development of real economy.
It is worth noting that on New Years day, the central bank announced that on December 27, 2019, the regular meeting of the monetary policy committee of the peoples Bank of China in the fourth quarter of 2019 (87th in total) was held in Beijing. It was proposed at the meeting that we should innovate and improve macro-control, adopt flexible and moderate monetary policy, use various monetary policy tools, maintain reasonable and sufficient liquidity, keep the growth rate of broad money m2 and social financing scale matching with the nominal growth rate of GDP, avoid flood irrigation, and maintain the overall stability of price level.
On the one hand, inflation CPI is under increasing pressure; on the other hand, it is under pressure of stable growth. Indeed, monetary policy is in a dilemma in a sense. This means that in order to prevent the spread of inflation expectations, it is essential to maintain the pertinence and stability of monetary policy.
Wen bin, chief researcher of China Minsheng Bank, told the first financial reporter that the flexibility and moderation of monetary policy means that monetary policy should be considered prospectively according to the macroeconomic situation, inflation level and internal and external economic environment, so as to improve the foresight, flexibility and pertinence of monetary policy.
Of course, this comprehensive reduction does not mean that the orientation of sound monetary policy has changed. The central banks relevant head said that the reduction was a hedge against the cash supply before the Spring Festival, and the total liquidity of the banking system will remain basically stable, flexible and moderate, rather than flooding, which reflects the scientific and steady control of the counter cyclical adjustment of monetary policy, and the stable monetary policy orientation has not changed.
Previously, the central economic working conference proposed that the main policy objective in 2020 is to reduce the financing cost of the real economy through monetary policy. The reduction of the standard will help guide financial institutions to reduce the loan interest rate of the real economy under the new LPR (loan quotation) mechanism.
Wen Bin said that the overall reduction of 0.5 percentage points, in line with market expectations. In view of the fact that 600 billion yuan of reverse repo has been due in January, and the factors such as tax payment, issuance of special local government bonds, and cash demand during the Spring Festival, liquidity is under pressure. The 800 billion yuan released through the reduction of reserve can meet the above liquidity needs on the one hand, and on the other hand, the release of low-cost long-term funds is conducive to reducing the capital cost of banks and guiding banks to reduce the real economy financing Cost of capital. It is expected that the price of LPR in the new phase will decrease slightly on January 20, with the LPR of 4.1% in one year and 4.75% in more than five years.
In addition, Wen bin believes that this reduction is conducive to boosting investor market confidence and will bring benefits to the stock market. At the same time, the overall reduction of the standard will further play the role of counter cyclical adjustment of monetary policy tools, stabilize the current gradually stable macro-economy, and improve the performance of listed companies.
Forward looking policies to fill the liquidity gap
With the Spring Festival approaching, due to the large demand for cash before the festival, it is expected to form a certain gap in liquidity.
Previously, some experts in the industry had estimated that the biggest time point of liquidity pressure is in January 2020, or as high as RMB 150 billion. However, the Ministry of Finance issued a quota of RMB 1 trillion for some new special debts in 2020 in advance, and required early issuance and use, so as to ensure effective use at the beginning of next year. The impact on bond supply may also be large, and there is no maturity of monetary policy instruments. In January The liquidity gap is close to 2.8 trillion yuan, which needs to be hedged by a reduction in reserve.
From the perspective of recent operations, the central bank has maintained a stable liquidity at the end of the year and has carried out open market operations for many times.
On November 5, 2019, the peoples Bank of China launched an MLF operation of 400 billion yuan, with a one-year term and a bid winning interest rate of 3.25%, 5 basis points lower than that of the previous period; on November 18, the peoples Bank of China launched a reverse repo operation of 180 billion yuan, with a term of 7 days and a bid winning interest rate of 2.5%, 5 basis points lower than the previous bid winning interest rate of 2.55%; on December 18, the peoples Bank of China launched an interest rate bidding of 20 RMB 0 billion reverse repurchase operation. Among them, in the 14 day reverse repo operation, the scalar amount is 150 billion yuan, and the bid winning interest rate is 2.65%, 5 basis points lower than the previous period.
Looking back at a series of operations of the central banks monetary policy in 2019, senior executives have repeatedly voiced their opinions. In fact, the tone and operational thinking of monetary policy are the same.
In the whole year of 2019, the central bank carried out a total of 8 comprehensive and targeted reduction operations. On January 4, the central bank announced to reduce the reserve ratio of financial institutions by 1 percentage point, and on January 15 and 25, by 0.5 percentage points respectively; on May 6, the central bank issued a notice of targeted reduction of reserve ratio, and from May 15, 2019, the central bank implemented a lower reserve ratio for small and medium-sized banks focusing on the local and serving the county, which was implemented three times on May 15, June 17 and July 15; on September 6, the central bank issued a notice of targeted reduction of reserve ratio On October 15, the peoples Bank of China announced a comprehensive reduction of the reserve ratio of financial institutions by 0.5 percentage points, and at the same time, another 1 percentage point reduction of the reserve ratio of urban commercial banks operating only within the provincial administrative region was targeted. On October 15 and November 15, it was implemented in place in two times, each time by 0.5 percentage points.
In addition, the market-oriented reform of interest rates in 2019 ushered in a landmark breakthrough. From August 20, the national interbank lending center announced LPR on the 20th of each month as the main reference and pricing benchmark for banks to issue loans.
At present, the new LPR has been released for the first time since August 20 to December 20 for the fifth time. The one-year LPR has been 20 basis points lower than the benchmark interest rate of loans of the same term, and the five-year LPR has been 10 basis points lower than the benchmark interest rate of loans of the same term.
In the view of many experts in the industry, improving the formation mechanism of LPR is conducive to promoting banks to reduce the actual loan interest rate, allocate more credit resources to small and micro enterprises and private enterprises, and improve the competitiveness of small and micro enterprises loans.
The central economic working conference held in December last year announced the keynote of macro policy in 2020, which stabilized the market expectations. The meeting stressed that we should continue to implement active fiscal policy and sound monetary policy. The steady monetary policy should be flexible and appropriate, keep the liquidity reasonable and abundant, and the scale growth of monetary credit and social financing should adapt to the economic development, so as to reduce the cost of social financing. We need to deepen the structural reform of the financial supply side, dredge the transmission mechanism of monetary policy, increase the medium and long-term financing of the manufacturing industry, and better alleviate the financing difficulties of private and small and medium-sized micro enterprises.
Strengthen support for private enterprises and small and micro enterprises
The state will increase its support for small and medium-sized banks that directly serve small and micro enterprises, promote the sharing of enterprise related information needed for loans, improve the assessment methods, promote large and medium-sized banks to form a reasonable division mechanism for serving small and micro enterprises, and hope that small and medium-sized banks will further increase the proportion of small and micro loans. This is a speech made by Premier Li Keqiang when he was in Chengdu on December 23, 2019, when he was in the Free Trade Zone Branch of Bank of Chengdu to learn about the scale and interest rate of small and micro loans.
On January 4, 2019, Li Keqiang visited the Inclusive Finance Department of the Bank of China, industrial and Commercial Bank of China and China Construction Bank and held a symposium in the CBRC, further taking tax reduction and fee reduction measures, and making good use of comprehensive and targeted reduction tools.
With the previous choice of three countries have big banks to investigate different, this choice of small and medium-sized banks is also of great significance. This also proves that solving the financing problems of private enterprises and small and micro enterprises will continue to be the top priority in the new years economic and financial work.
Since 2019, it has been committed to unblocking the transmission mechanism of monetary policy, promoting the virtuous circle of Finance and real economy, and one party, two sessions have offered high-tech solutions successively.
For example, in order to maintain the sufficient liquidity of small and medium-sized banks, the central bank increased the rediscount line by 200 billion yuan and the standing lending facility line by 100 billion yuan in June 2019, and strengthened the liquidity support for small and medium-sized banks; in July last year, it increased the small and medium-sized re loan line by 50 billion yuan, focusing on supporting small and medium-sized banks to expand the credit supply to small, micro and private enterprises.
On December 12 last year, when the national regular meeting deployed to further reduce the comprehensive financing cost of small and micro enterprises, it was proposed that the comprehensive financing cost of inclusive small and micro loans should be reduced by another 0.5 percentage points in 2020, and the growth rate of inclusive small and micro loans of five large state-owned banks should not be less than 20%.
Li Junfeng, director of the Inclusive Finance Department of the CBRC, said at the recent key work briefing of the CBRC that the CBRC will start from many aspects. Including: continuously deepening the supply side structural reform, enhancing the credit supply of small and micro enterprises; improving the long-term mechanism of commercial banks assessment and evaluation, and immediately formulating and promulgating the measures for supervision and evaluation of financial services of small and micro enterprises of commercial banks; further promoting small and micro enterprises to reduce financing costs; further improving the loan mode of small and micro enterprises, mainly expanding the renewal loan and credit loan Improve the efficiency of small and micro loans and reduce the excessive dependence on mortgage guarantee; in addition, we will further study and promote the construction of enterprise credit information sharing platform with relevant departments, so as to win customers for commercial banks and reduce the transaction cost of small and micro loans of commercial banks.
The central bank said that the reduction increased the sources of funds for financial institutions, that large banks should focus on services, that small and medium-sized banks should focus more on the main business, and that they should actively use the reduction funds to increase support for small and micro enterprises and private enterprises. In this comprehensive reduction, only urban commercial banks operating in the provincial administrative areas, rural commercial banks serving the county, rural cooperative banks, rural credit cooperatives and rural banks and other small and medium-sized banks have received more than 120 billion yuan of long-term capital, which is conducive to strengthening the capital strength of small and micro banks serving private enterprises based on the local and returning to the source. At the same time, the reduction of the standard reduces the banks capital cost by about 15 billion yuan per year. Through bank transmission, the actual cost of social financing can be reduced, especially the financing cost of small and micro enterprises and private enterprises.