In May, the results of the Medium Term Loan Facility (MLF) operation were released, and the one-year MLF interest rate as the medium-term policy interest rate remained unchanged for nine consecutive months. On May 15, the People's Bank of China announced that, in order to maintain a reasonable and sufficient liquidity of the banking system, it carried out an open market reverse repurchase operation of 2 billion yuan and an MLF operation of 125 billion yuan, and the bid winning interest rate remained unchanged.
Since 125 billion yuan of MLF is due this month, this MLF operation will continue at an equal price. At the same time, 2 billion yuan of reverse repurchase expired on that day, and the public market realized zero launch and zero withdrawal.
The MLF operating interest rate remained unchanged in May, which was in line with the market's general expectations. Since the loan market quoted rate (LPR) is increased from the one-year MLF rate, the MLF continues to "hold its ground" this month, which also means that the LPR rate will remain unchanged this month.
Dong Ximiao, the chief researcher of China Merchants Association, said that the interest rate of both enterprise loans and household loans is at a historical low, entering the "3" era in an all-round way. In this case, it is reasonable that the LPR does not continue to downlink. The LPR remains unchanged, which helps to maintain the basic stability of bank interest margin and enhance the sustainability of serving the real economy and the stability of development.
Wang Qing, chief macro analyst of Oriental Jincheng, said that due to the faster than expected economic growth in the first quarter and the stronger recent macro data, it is currently in the policy effect observation period.
The issuance of ultra long term special treasury bonds due to the fluctuation of financial data and superimposition is imminent. The use of subsequent monetary policy tools has attracted widespread attention in the market. Expectations for reserve ratio and interest rate cuts have also increased.
At the meeting of the Political Bureau of the CPC Central Committee held on April 30, it was proposed that policy tools such as interest rates and deposit reserve ratio should be flexibly used to increase support for the real economy and reduce the cost of comprehensive social financing.
Dong Ximiao believes that China's prudent monetary policy will be more precise and effective, or continue to implement reserve ratio reduction and interest rate reduction in the second quarter - by reducing the deposit reserve ratio, meet the demand for medium and long-term liquidity from the issuance of government bonds and ultra long term special treasury bonds, continue to reduce the capital cost of financial institutions, and create a more appropriate liquidity environment; By reducing policy interest rates such as MLF interest rates, the Bank will be guided to reduce LPR, further reduce the interest expenditure of enterprises (institutions) and residents, continue to stimulate the investment and consumption demand of enterprises and residents, and accelerate the recovery of the macro-economy.
Mingming, the chief economist of CITIC Securities, also believes that monetary policy will maintain an appropriate monetary and financial environment. Specifically, first, in the future, the central bank will maintain reasonable and sufficient liquidity and stable operation of money market interest rates at the stage of loose fiscal power and concentrated national debt supply, and is expected to hedge the pressure on government debt supply through a small reduction in reserve ratio or trading of national debt and other innovative tools. Second, at present, the central bank still pays more attention to changes in overseas monetary policy and domestic demand for cost reduction. Compared with the quantitative tools, the deposit interest rate and LPR interest rate and other price side monetary tools have room for further reduction.
