In August 2019, the central bank pushed forward the marketization reform of loan interest rate. After the reform, LPR refers to MLF, and the loan interest rate anchors LPR. The main driving factors of LPR decline are the decrease of MLF interest rate and the decrease of bank capital cost.
In order to provide a benchmark for LPR pricing, the central bank will operate MLF on the 15th of every month (postponed in case of holidays) this year. Judging from the operation in June, MLF interest rate remains unchanged.
In addition, since the middle and late May, the central interest rate of money market has risen, which means that the marginal capital cost of banks has increased in the near future. In this context, the power of banks to reduce the price of LPR is insufficient.
At the June 17 meeting of the State Council, it was pointed out that we should seize the key point of reasonable profit sharing, ensure the main body of the market and stabilize the basic economic market. We will further promote the financial system to make a reasonable profit of 1.5 trillion yuan to all kinds of enterprises throughout the year through a series of policies such as guiding the downward movement of loan and bond interest rates, issuing preferential interest rate loans, implementing loans for small and medium-sized micro enterprises to postpone repayment of principal and interest, supporting the issuance of unsecured credit loans for small and micro enterprises, and reducing bank charges.
Wu chaoming, chief economist of Caixin securities, said that the possibility of the central bank to significantly reduce policy interest rates in the future is declining. LPR is equal to policy interest rate plus point spread, which includes profit, bank charges and other factors. This meeting proposed that grasp the key of reasonable interest yield, which means that reducing point spread of financial institutions is the main trend, and reducing policy interest rate is not the main option.
But the LPR remained unchanged in June. Wang Qing believes that the unchanged LPR quotation in June does not mean that the actual loan interest rate will remain unchanged. In fact, the bank may also reduce the actual interest rate in the new loans according to the credit policy, customer qualification and other reasons, that is, adjust the increase and decrease points on the basis of LPR.
According to the data of the central bank, in March this year, the interest rate of general loans (excluding personal housing loans) was 5.48%, 0.62 percentage points lower than that in July 2019 before the LPR reform, significantly higher than the one-year LPR (0.46 percentage points) in the same period.
In this way, the suspension of one-year LPR interest rate cut for two consecutive months will not substantially change the downward trend of the enterprises real loan interest rate, and this years process of bank interest transfer to the real economy will continue to advance. Wang Qing said.
In the second half of the year, LPR may speed up
In Lujiazui Forum last week, Yi Gang, governor of the central bank, said that we should guide the market interest rate to continue to decline through market-oriented reform of interest rates, promote the financial sector to make a reasonable profit to enterprises, and strive to alleviate the problem of expensive financing. Since this year, the financial sector has made profits to enterprises, mainly including three parts: first, by reducing interest rates. Second, direct monetary policy tools to promote the transfer of interest. Third, the bank reduces the charges to make profits. It is estimated that the financial system will yield 1.5 trillion yuan to enterprises through the above three aspects this year.
According to the reporter, leading the loan downward means that LPR will further decline. Reducing LPR will be achieved by reducing the cost of the banks liability side, including reducing MLF interest rate, reducing the standard and even reducing the deposit benchmark interest rate.
On June 17, the national regular meeting also pointed out that we should make comprehensive use of such tools as reducing the standard and refinancing to keep the market liquidity reasonable and abundant, increase efforts to solve the financing difficulties and ease the capital pressure of enterprises. This is the second time that the State Council has mentioned lowering the standard. Some market participants believe that in most cases, after the National Peoples Congress mentioned the reduction of the standard, there will be measures to reduce the standard within two weeks. In addition, the large-scale issuance of government bonds such as anti epidemic special treasury bonds also needs to provide liquidity support by reducing the standard.
In the past year or two, the National Peoples Congress has made the first call for the reduction of standards, and then implemented it within two weeks, that is, the so-called two week law. This time, it is estimated that there will not be much change. Zhang Jiqiang, chief analyst of Huatai Group, said.
Wang Qing believes that in the second half of the year, in the process of GDP growth returning to the potential economic growth level (about 6.0%), further efforts of macro policies are still needed, among which the demand for counter cyclical adjustment of monetary policy is not weakened. This year, while the financial system is increasing the interest yield to the real economy, the process of policy interest rate reduction and standard reduction is expected to continue in the second half of the year. There is still about 40 basis points room for MLF and Omo interest rates to be lowered. In order to smoothly guide the downward trend of corporate loan interest rate, there is a certain space for policy interest rates such as MLF and Omo to be lowered during the year. In the second half of the year, the downward speed of LPR quotation will be accelerated, which means that the loan interest rate of general enterprises will be reduced by a larger margin over the same period, which will stimulate the demand of enterprise credit and promote the development of broad credit to a deeper level, Wang said Source: responsible editor of 21st century economic report: Yang Bin_ NF4368
In order to smoothly guide the downward trend of corporate loan interest rate, there is a certain space for policy interest rates such as MLF and Omo to be lowered during the year. In the second half of the year, the downward speed of LPR quotation will be accelerated, which means that the loan interest rate of general enterprises will be reduced by a larger margin over the same period, which will stimulate the demand of enterprise credit and promote the development of broad credit to a deeper level, Wang said