What does the central bank mean by reducing the refinancing rate by 0.25 percentage points?

category:Finance
 What does the central bank mean by reducing the refinancing rate by 0.25 percentage points?


In response to the impact of the epidemic, since this year, the central bank has successively launched 300 billion yuan of special anti epidemic loans and 1.5 trillion yuan of inclusive re loans, increasing the rediscount amount of 1.8 trillion yuan.

The so-called re loan refers to the loan from the central bank to financial institutions. In the early stage, it was one of the channels for the central bank to control the basic currency. In recent two years, the newly increased loan was mainly used to promote the adjustment of credit structure, and to guide the expansion of credit supply in counties and agriculture, rural areas and farmers. Rediscount is the behavior of the central bank to discount the commercial bills held by financial institutions. In China, the central bank adjusts the total amount and interest rate of rediscount timely, and makes clear the choice of rediscount bills, so as to achieve the purpose of handling basic currency and implementing financial macro-control, and at the same time, it plays the role of adjusting credit structure.

Refinancing is actually a mortgage loan granted by the central bank to the bank, and the bank needs to pay interest to the central bank. As the bank needs to initiate an application for refinancing, it can increase the willingness of bank credit expansion, improve the utilization efficiency of refinancing and provide lower cost financial support to the bank by reducing the interest rate. A person from the strategic planning department of a joint-stock bank said that according to the previous policy, before the end of June, the central bank issued a new inclusive small and micro enterprise loan no higher than the loan market quotation rate (LPR) plus 50 basis points to local legal person banks, allowing them to apply for the same amount of refinancing funds. However, the policy window period has come, and the amount of refinancing is still sufficient, and the interest rate will be lowered from July 1, We can encourage banks to continue to issue small-scale loans to support agriculture by reducing the cost of capital.

Yi Gang, the governor of the central bank, previously said at the Lujiazui forum that the financial sector will yield 1.5 trillion yuan of interest to enterprises this year through reducing interest rates, direct access to monetary policy instruments, and reducing bank charges. The latest regular meeting of the monetary policy committee of the central bank in the second quarter of 2020 (the 89th session in total) stressed that monetary policy should adhere to the appropriate aggregate policy, not only to support the recovery of the real economy, but also to pay attention to its sustainable development. In order to effectively play the precise drip irrigation role of structural monetary policy tools, the regular meeting of the second quarter proposed to improve the direct access of the policy, continue to make good use of the rediscount line of 1 trillion yuan of inclusive refinancing, implement the newly created direct entity tools, support the qualified local legal person banks to implement the deferred repayment of principal and interest and the issuance of credit loans to the inclusive small and micro enterprises, and at the same time We will increase the proportion of loans for small and micro enterprises, credit loans and manufacturing loans. Source: surging news editor: Chen Hequn_ NB12679

Yi Gang, the governor of the central bank, previously said at the Lujiazui forum that the financial sector will yield 1.5 trillion yuan of interest to enterprises this year through reducing interest rates, direct access to monetary policy instruments, and reducing bank charges.