The LPR remained unchanged for six months in a row

category:Finance
 The LPR remained unchanged for six months in a row


Wang Qing, chief Macro Analyst of Dongfang Jincheng, also said that the LPR quotation has remained unchanged for six consecutive months. The fundamental reason lies in the effective control of the domestic epidemic situation, the V-shaped reversal of the macro-economy, the total easing represented by the reduction of interest rates and the reduction of reserve requirements, and the monetary policy emphasizes the balance between stable growth and risk prevention.

In addition, as far as the market is concerned, the liquidity tension in the inter-bank market recently also makes the quotation banks lack the motivation to compress LPR quotations. In order to crack down on financial arbitrage and prevent flooding, the short-term market interest rate represented by dr007 (inter-bank 7-day pledge repo rate) and the medium-term market fund interest rate represented by interbank deposit receipt issuance rate have continued to rise in recent years. At present, the process of tight currency inevitably leads to the corresponding increase of the average marginal capital cost of banks, which restricts the quotation banks to reduce the LPR quotation points. Wang said.

Although the LPR quotation in October has not been lowered, in the view of industry insiders, the enterprise loan interest rate in the fourth quarter will still maintain a downward trend. The main reason behind this is that in order to achieve the target of 1.5 trillion yuan of financial profit to the real economy this year, the general loan interest rate of enterprises in the fourth quarter still needs to maintain a downward trend of about 10 basis points.

However, there is still a convergence of funds on that day. Data on October 20 showed that Shibor (Shanghai interbank offered rate) rose across the board. The results showed that there was an upward trend of 17 BP to 2.187%, 3.1bp to 2.23% and 0.2bp to 2.634% in one month. In the future, Wen Bin said that the central bank will continue to strengthen the operation of the open market and adopt the policy tool combination of reverse repurchase + MLF, so as to maintain the reasonable and sufficient market liquidity and the overall stability of the market interest rate, and the probability of reducing the reserve rate and interest rate by the end of the year. Wang Qing said that with the end of the year approaching, the issuing interest rate of inter-bank certificates of deposit is expected to change from up to down, tight currency process will come to an end, and the average marginal capital cost of banks will turn to marginal downward. Even if the MLF operating interest rate remains unchanged before the end of the year, banks may also slightly reduce the LPR quotation plus point, changing the situation that the difference between MLF interest rate and one-year LPR quotation point has been fixed at 90 basis points since September last year, thus triggering a slight downward trend of one-year LPR quotation. Source of this article: Yang Bin, editor in charge of the first finance and Economics_ NF4368

However, there is still a convergence of funds on that day. Data on October 20 showed that Shibor (Shanghai interbank offered rate) rose across the board. The results showed that there was an upward trend of 17 BP to 2.187%, 3.1bp to 2.23% and 0.2bp to 2.634% in one month.

In the future, Wen Bin said that the central bank will continue to strengthen the operation of the open market and adopt the policy tool combination of reverse repurchase + MLF, so as to maintain the reasonable and sufficient market liquidity and the overall stability of the market interest rate, and the probability of reducing the reserve rate and interest rate by the end of the year.

Wang Qing said that with the end of the year approaching, the issuing interest rate of inter-bank certificates of deposit is expected to change from up to down, tight currency process will come to an end, and the average marginal capital cost of banks will turn to marginal downward. Even if the MLF operating interest rate remains unchanged before the end of the year, banks may also slightly reduce the LPR quotation plus point, changing the situation that the difference between MLF interest rate and one-year LPR quotation point has been fixed at 90 basis points since September last year, thus triggering a slight downward trend of one-year LPR quotation.