The central bank's small shrinkage sequel 400 billion yuan MLF exceeded the expected "interest rate cut" and is expected to drive this month's LPR reduction

Reporter Liu Qi

On August 15th, the People's Bank of China (hereinafter referred to as the "central bank") issued an announcement. To maintain the banking system, the liquidity of the banking system was reasonable and abundant, and the 400 billion yuan intermediate lending convenience (MLF) operation and the public market reverse repurchase operation on that day. It fully meets the needs of financial institutions.

It is worth noting that the bid interest rates of MLF operations and 7 -day reverse repurchase have decreased by 10 basis points to 2.75%and 2%. Analysts generally believe that after the policy interest rate is reduced, LPR (loan market quotation interest rate) of the first year and 5 years of this month is highly probably lowered.

MLF mild shrinkage meets expectations

In August, the MLF expired was 600 billion yuan. Previously, the market expected that the central bank would have a high probability of shrinking.

"In August, MLF gently shrunk by 200 billion yuan, which meets market expectations and meets the bank's accompanying market and central bank's" passive "recycling." Wen Bin, chief economist of China Minsheng Bank, said in an interview with the Securities Daily reporter that compared to the reporter of the Securities Daily, compared In the past few rounds of MLF shrinkage, the scale of reduction in this time shows that the central bank does not want to release signals of excessive tightening monetary policy, and will still maintain a state of reasonable and abundant basic currencies.

Wang Qing, chief macro analyst of Dongfang Jincheng, also believes that the MLF shrinkage in August broke the equal sequel model of the previous four consecutive months, which is in line with the market's general expectations.

"The current market liquidity is at a significant level. In July, the average yield of the 1 -year interbank deposit deposit payment rate of commercial banks (AAA) was 2.21%. Since August, the indicator has further declined, which has significantly lower than the 1 -year MLF operating interest rate. This will not be ruled out that the MLF bidding volume of the first -level dealers in August will decrease, which will drive the MLF shrinkage sequel. "Wang Qing told the Securities Daily reporter.

The central bank explained the reverse repurchase of reverse repurchase in July in the "China Monetary Policy Implementation Report in the Second quarter of 2022 in the second quarter of 2022", pointing out that "the bidding volume of first -level traders has continued to decrease, and the People's Bank of China further reduces the reverse repurchase accordingly The operation volume, but still fully meets the needs of bidding agencies. "

"This means that since July, the central bank has continued to carry out reverse repurchase shrinkage, which is caused by demand, and it is more 'passive' response, not active shrinkage to release tightening signals. In August, the MLF shrinkage was also expected, and it would not have a greater impact on market expectations. "Wen Bin said.

The state of liquidity is partially charged and will continue

The central bank also reduced the MLF operation and 7 -day inverse repurchase interest rates to 10 basis points to 2.75%and 2%. The last adjustment of the two was on January 17 this year.

Wang Qing believes that the MLF interest rate in August unexpectedly lowered 10 basis points, which significantly exceeded market expectations. This may be relatively slow with the recent economic restoration, and the recycled twists and turns of the wide credit process shows that the current monetary policy is still based on steady growth. The domestic structural inflation pressure and the tightening of overseas central banks have not composed of domestic central bank policies and interest rate cuts. Diseases.

"This means that the current market liquidity that is in abundant state will continue for a period of time. Next, the regulatory level may increase the assessment efforts and promote wide currency to wide credit." Wang Qing expects that the interest rate of loan interest rates is significantly large The downlink, coupled with the full effort of structural monetary policy tools and newly established policy financial instruments, financial data in August will rise significantly. This will hedge the recent economic downturn, laying the foundation for the return of GDP as soon as possible in the second half of the year.

In Wen Bin's view, the interest rates of MLF and inverse repurchase policies in August decreased by 10 basis points, mainly because the domestic economic recovery foundation still needs to be stable, as well as focusing on stabilizing the real estate financing chain to increase wide credit conduction.

Liang Si, a researcher at the Bank of China Research Institute, said in an interview with the Securities Daily that the policy interest rate reduced the linkage effect with market interest rates. Since March, the interest rates of key currency markets such as DR007 and R007 have long maintained below the 7 -day reverse repurchase interest rate and maintained the downward trend as a whole; in early August, the two had fallen to about 1.45%and 1.35%, respectively. The low interest rate of the currency market means that the market liquidity is relatively abundant. Even if the scale of MLF launch is reduced by 200 billion yuan, it will not affect the liquidity of the market. The 7 -day reverse repurchase and one -year MLF bid interest rate decline, which enhances the same frequency resonance as market interest rates, helps strengthen the role of the policy interest rate system, and better achieve the guidance of market interest rates.

The high probability of LPR this month is adjusted simultaneously

At present, the 1 -year LPR is 3.7%, and the LPR of more than 5 years is 4.45%. Regarding the upcoming new period of LPR, Wang Qing believes that the MLF interest rate in August means that the price of LPR quotation has changed in the month of the month, and the recent bank capital costs have also settled faster. There is no suspense in the LPR downgrade in August. Considering that the recent mortgage market is inclined to the lender, it does not rule out the possibility of an increase of more than 10 basis points by the LPR of more than 5 years.

"Under the interest rate transmission mechanism system, the policy interest rate reduction will drive the market benchmark interest rate to move down, and then further drive the market interest rate decline." Liang Si said that according to past experience, there is a stable price comparison relationship between most of the time between LPR and MLF. The former It will follow MLF interest rates to decrease simultaneously. It is expected that LPR will be adjusted simultaneously this month, which will drive the loan interest rate to decline to further reduce the cost of real economy funds and alleviate the financial burden of corporate finance. According to Xie Yunliang, the chief macro analyst of Cinda Securities, the current credit demand is still weak, and the residential mortgage loans are weaker. In order to boost the demand for the real economy and stabilize the real estate market, it is imperative to reduce LPR. After the policy interest rate was reduced, the LPR settled in corresponding water to the canal.

In the later period, Wen Bin believes that the MLF expires from September to December. In the current environment with abundant liquidity, subsequent MLFs may continue to shrink and continue. With the slowdown of the Federal Reserve ’s interest rate hike rhythm and the policy tone of“ I ’m dominated”, the possibility of cutting interest rates again does not rule out. The probability of decline in the third quarter is not high, but if the real estate financing has improved in the fourth quarter, the process of wide credit is accelerated. With the recovery of structural liquidity shortages, it provides long -term liquidity to the banking system and further reduces liabilities for liabilities. The cost is not ruled out that 0.25 percentage points will be performed in a timely manner.

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