Can LPR step in place and reduce the RRR a year ago? Thats what the agency says

category:Finance
 Can LPR step in place and reduce the RRR a year ago? Thats what the agency says


In addition, on November 16, the central bank launched a one-year MLF operation of 800 billion yuan, while the maturity of MLF in November was 600 billion yuan. This means that the central bank has injected 200 billion yuan of medium and long-term liquidity into the banking system through the excessive continuation of MLF this month.

Wang Qing, chief Macro Analyst of Dongfang Jincheng, believes that since the end of October, short-term market interest rates represented by dr007 have risen again due to the credit default events of large local state-owned enterprises, In addition, medium-term market interest rates such as interbank certificate of deposit issuance interest rate will continue to rise, which will hedge the impact of the decline in the cost of liabilities such as structured deposits and large certificates of deposit, which means that the average marginal cost of capital of banks has declined significantly in the near future, and the quotation banks have insufficient power to reduce the 1-year LPR quotation plus point in November.

The chief economist of Founder Securities explained that the phenomenon of credit default of some local state-owned enterprises has an impact on the liquidity of banks in the short term, but it will not continue. The pressure mainly lies in the compression of structural deposits. In general, the liquidity at the end of the year will be relatively tight. MLF will moderately ease the liquidity tension, but in fact, there is still a certain gap between MLF and the demand of banks.

Exclusion of possibility of RRR reduction before the year

Under the background of tight liquidity, industry insiders still generally believe that the possibility of reducing the reserve requirement before the end of the year can almost be ruled out.

Tao Jin, a researcher at Suning Financial Research Institute, said that with the MLF interest rate unchanged, the probability of LPR reduction this month is also small. Recent fluctuations in the credit bond market may prompt the central bank to pay more attention to medium-term liquidity. However, credit default is not a systemic risk, and the impact on liquidity is also short-term. The central bank will further strengthen the short-term liquidity injection, but will not adjust the policy interest rate.

According to Wang Qings analysis, the regulatory authorities have said on several occasions recently that Chinas economy is relatively strong or economic growth is better than expected, which means that there is no demand for reducing policy interest rates in the short term. At the same time, the regulatory authorities also stressed that the future economic recovery will face greater uncertainty, and there can be no policy cliff, that is, policy tightening suddenly, which indicates that there is no condition for raising policy interest rates in the short term. As a result, the fixed MLF operating rate in November is in line with the general expectation of the market, and there is little possibility of MLF interest rate adjustment in the next few months. Color believes that from the end of this year to the first quarter of next year, the operation of monetary policy is mainly stable, which means that the policy interest rate may not be adjusted. Since this year, the liquidity is relatively sufficient, and the market interest rate is significantly lower than the policy interest rate in the first three quarters. Source: Chen Hequn, editor in charge of Finance and Economics_ NB12679

According to Wang Qings analysis, the regulatory authorities have said on several occasions recently that Chinas economy is relatively strong or economic growth is better than expected, which means that there is no demand for reducing policy interest rates in the short term. At the same time, the regulatory authorities also stressed that the future economic recovery will face greater uncertainty, and there can be no policy cliff, that is, policy tightening suddenly, which indicates that there is no condition for raising policy interest rates in the short term. As a result, the fixed MLF operating rate in November is in line with the general expectation of the market, and there is little possibility of MLF interest rate adjustment in the next few months.

Color believes that from the end of this year to the first quarter of next year, the operation of monetary policy is mainly stable, which means that the policy interest rate may not be adjusted. Since this year, the liquidity is relatively sufficient, and the market interest rate is significantly lower than the policy interest rate in the first three quarters.