MLF cut delivery rate remains unchanged: LPR may not fall this month

category:Finance
 MLF cut delivery rate remains unchanged: LPR may not fall this month


The expiry date of this months MLF is on the 14th, and the central bank did not renew it on that day, but chose to launch it on the 15th. The two-day total net withdrawal fund is 100 billion yuan, and the expectation of interest rate reduction has not been fulfilled. Some analysts in the industry say that this shows that monetary policy is cautious about further easing in the near future.

Today, in line with MLF operations, there is also the release of targeted funds.

The peoples Bank of China announced that since April 15, 2020, the peoples Bank of China has reduced the deposit reserve ratio by 1 percentage point to rural financial institutions and urban commercial banks operating only in provincial administrative regions, which has been implemented in place in two times, each time by 0.5 percentage points. In order to implement the second adjustment of the deposit reserve ratio, long-term funds of about 200 billion yuan were released on May 15.

For this time, the interest rate of MLF remains unchanged, Wen bin, chief researcher of Minsheng Bank, said that on the one hand, the central bank is trying to stabilize the RMB exchange rate, on the other hand, because the inflation rate has turned around, CPI is going down, and the power of MLF reduction is insufficient.

He said that the open market operation of the central bank continued to adopt the mode of locking short and extending long, aiming to provide medium and long-term funds for the market, match the credit delivery cycle and promote financial support entities. It is expected that monetary policy will remain stable in the short term, and there will not be much change. The interest rate of LPR (quoted rate of loan market) on May 20 will remain unchanged.

According to the latest data, as of the end of the 15th trading day, the weighted average interest rate of dr007 was 1.4958%, up 17.79bp from the previous day; the weighted average interest rate of dr001 was 0.8555%, up 11.57bp from the previous day. In terms of Shanghai interbank offered rate, most of them went up, Shibor rose 12.1bp to 0.8640% overnight, and Shibor rose 14.3bp to 1.6570%.

In fact, since the end of April, the reverse repo operation of the central bank has entered into a super long standby state due to the abundant market liquidity, which has been suspended for more than 30 consecutive trading days. During this period, dr001 remained below 1% for several days, with a minimum of 0.54%. Therefore, the market is not surprised to see MLF continue.

This is also reflected in the bond market. Recently, as the expectation of further easing of monetary policy failed, the bond market fell rapidly and fell into adjustment since the beginning of the month. Among them, the yield of the 10-year Treasury bond active bond 190015 is 20bp higher than the low of 2.46% in April, and the 10-year Treasury bond futures are out of the rare five consecutive negative market.

CITIC Securities also said that the current monetary policy has entered the stage of structural adjustment, precise support for the real economy and internal and external balance. The economic fundamentals are still in the repair channel after the epidemic. The central bank is relatively recognized by the current liquidity level, the capital interest rate is still operating at a low level, and restricted by the RMB exchange rate factor. The monetary policy is prudent in the near future. In the short term, the probability of further substantial easing is low. In addition, combined with the statement of the first quarter monetary policy implementation report released by the central bank a few days ago, the weight of the impact of external constraints on monetary policy is rising. For the bond market, there are signs of oversold in the short-term bond market. If there is no more large-scale and stronger monetary easing cooperation, the possibility of another low interest rate is not great. CITIC Securities said. Source: editor in charge of the first financial daily: Guo Chenqi, nbj9931

CITIC Securities also said that the current monetary policy has entered the stage of structural adjustment, precise support for the real economy and internal and external balance. The economic fundamentals are still in the repair channel after the epidemic. The central bank is relatively recognized by the current liquidity level, the capital interest rate is still operating at a low level, and restricted by the RMB exchange rate factor. The monetary policy is prudent in the near future. In the short term, the probability of further substantial easing is low.

In addition, combined with the statement of the first quarter monetary policy implementation report released by the central bank a few days ago, the weight of the impact of external constraints on monetary policy is rising. For the bond market, there are signs of oversold in the short-term bond market. If there is no more large-scale and stronger monetary easing cooperation, the possibility of another low interest rate is not great. CITIC Securities said.