Maintain the total amount of finance, make efforts to stabilize enterprises and ensure employment -- an interview with Yi Gang, President of the peoples Bank of China

category:Finance
 Maintain the total amount of finance, make efforts to stabilize enterprises and ensure employment -- an interview with Yi Gang, President of the peoples Bank of China


Effective implementation of monetary policy

Reporter: under the impact of the epidemic, what financial policies has the peoples Bank of China adopted to deal with it?

During the Spring Festival holiday, we issued an emergency special refinancing of 300 billion yuan, which has achieved positive results in guaranteeing supply. We firmly supported the financial market to open on February 3 after the Spring Festival, and put in 1.7 trillion yuan of short-term liquidity beyond expectations. After announcing a comprehensive reduction of 0.5 percentage points in the deposit reserve ratio on January 1, this year, we also lowered the deposit reserve ratio twice, with an accumulated long-term capital of 1.75 Trillion yuan.

Subsequently, the number of monetary policy instruments increased from 300 billion yuan to 500 billion yuan, and then to 1 trillion yuan. Under different circumstances, the meaning of policy is different, the number is larger and the interest rate is more and more market-oriented. Commercial banks use these tools of the central bank to provide low-cost loans for the real economy, which strongly supports the stability of enterprises and employment.

Reporter: how to evaluate the financial operation in the first half of the year?

Yi Gang: in the first half of this year, there are many bright spots in the macro financial data, which also shows that the steady monetary policy has been effectively implemented. From the macro total, the financial indicators are significantly higher than last year. At the end of June, M2 increased by 11.1% year-on-year; the scale of social financing increased by 12.8%; new loans in the first half of the year were 12.1 trillion yuan, an increase of 2.4 trillion yuan year-on-year.

From the price point of view, since this year, we have focused on guiding the downward trend of interest rates in major markets. The bid winning rate of 7-day reverse repurchase operation in the open market dropped by 30 basis points to 2.2%; the bid winning rate of medium-term loan facility decreased by 30 basis points to 2.95%; the one-year loan market quotation rate (LPR) decreased by 30 basis points to 3.85%; the refinancing rate was reduced by 50 basis points.

Under the guidance of monetary policy, the overall interest rate of the market goes down and the financing cost of enterprises is significantly reduced. In June, the weighted average interest rate of bond repo was 1.89%, down 0.21 percentage points from the end of the previous year; the yield of 10-year Treasury bonds was 2.82%, down 0.32% from the end of the previous year; the loan interest rates of Inclusive Finance, small and micro enterprises, private enterprises and manufacturing industries all dropped to historical lows. In particular, the loan interest rate of Inclusive Finance is now around 5%, which is 0.8% lower than last year.

The decline in interest rates has strongly supported the real economy, significantly optimized the structure of loans, and significantly increased the number of market participants supported by inclusive small and micro loans. At the end of June, there were nearly 30 million market entities with credit and more than 23 million with loan balance, mainly small and micro enterprises and individual businesses.

Reporter: how to judge the current macroeconomic situation in China?

China novel coronavirus pneumonia: Chinas economy has achieved the first recovery in the world because of the effective control of the new crown pneumonia epidemic in China. Chinas GDP rebounded strongly in the second quarter, with a year-on-year growth of 3.2%, which is the only major economy with positive growth in the world.

On the one hand, various industries recovered rapidly; on the other hand, demand also gradually recovered, investment rebounded significantly, consumption continued to recover, and exports improved significantly. While the economy is recovering, the price level has remained stable.

Reporter: what is the focus of the work of the peoples Bank of China in the second half of the year?

First of all, the monetary policy should be more flexible, moderate and precise oriented, and the various policies that have been issued to stabilize enterprises and ensure employment will be implemented effectively. We should make comprehensive use of a variety of monetary policy tools to guide the growth of broad money supply and social financing scale significantly higher than last year. At the same time, we should pay attention to grasp the rhythm and optimize the structure, so as to promote the reasonable growth of loans for inclusive small and micro enterprises and medium and long-term loans for manufacturing industry.

In addition, we should continue to deepen the reform of the financial system and mechanism, promote the implementation of the financial reform measures that have been issued, and support the local government to take the regional financial risk as the goal, and deepen the market-oriented reform of rural financial institutions.

In addition, we will continue to do a good job in financial management and financial services, make overall plans for financial poverty alleviation, and deepen the pilot projects of green finance, Inclusive Finance and science and technology finance.

Unswervingly promote the orderly opening up of the financial industry

Reporter: in the face of a more complex and changeable international situation, will Chinas financial opening up, international cooperation and RMB internationalization be affected?

Yi Gang: no matter how the international situation changes, the most important thing is to do our own thing well and unswervingly deepen the reform and opening up of the financial industry. First of all, China and the United States should continue to implement the first phase of the Sino US economic and trade agreement, and implement the financial reform and opening-up measures announced in recent years, such as abolishing the restrictions on the share ratio of foreign investors in securities, fund management, futures, life insurance, etc.; abolishing the investment quota limit for qualified foreign investors and RMB qualified foreign investors; and approving the entry of institutions such as express, MasterCard and Fitch into the Chinese market Field, etc. Secondly, we should continue to promote the full implementation of the pre admission national treatment plus negative list management system, and unify the foreign exchange management policy of the bond market opening to the outside world.

China has always advocated international cooperation in the fight against the epidemic. We will continue to deeply participate in global economic and financial governance, earnestly safeguard multilateralism, and constructively participate in the G20 debt relief initiative, so as to provide some support for debt reduction of developing countries, emerging market countries and some low-income countries.

At present, the momentum of RMB internationalization is very good. In the first half of the year, the amount of cross-border receipts and payments of RMB was 12.7 trillion yuan, an increase of 36.7% over the same period of last year. RMB has become the second largest cross-border currency in China for eight consecutive years. In the first quarter, the share of RMB foreign exchange reserves exceeded 2%, nearly double that when it was added to the special drawing rights basket (SDR) in 2016. We will continue to actively and steadily promote the internationalization of RMB and the opening of capital account.

Source: Xinhuanet editor in charge: Zhong Qiming_ NF5619