Zhongxin Jingwei Client March 20th (Zhang Meng) On the 20th, the People's Bank of China authorized the National Interbank Funding Center to announce the latest LPR interest rate, of which the LPR for one year is 4.05% and the LPR for five years or more is 4.75%, which is the same as last time.

Source: China Foreign Exchange Trading Center and National Interbank Funding Center

On Monday (16th), the central bank lowered its quota for the second time in the year. The central bank implemented a targeted reduction in inclusive finance, and targeted banks that met the assessment criteria by 0.5 to 1 percentage point. In addition, the qualified joint-stock commercial banks will be further reduced by 1 percentage point to support the issuance of loans to the inclusive financial sector. The above-mentioned targeted RRR cuts totaled 550 billion yuan of long-term funds.

On the 16th, the central bank launched a medium-term loan facility (MLF) operation of 100 billion yuan. But this time interest rates have not been lowered, remaining at 3.15%.

Regarding the latest LPR quote, the market has previously tended to keep the LPR unchanged.

Source: China Foreign Exchange Trading Center and National Interbank Funding Center

LPR previous quote summary

On August 20, 2019, the first quote after the reform of the LPR formation mechanism was announced, with a one-year term of 4.25% and a five-year term of 4.85%.

On September 20, 2019, the second quotation of LPR showed that the one-year LPR was 4.2%, which was 5 basis points lower than the quotation that was first announced on August 20. The LPR for more than five years was 4.85%, which was the same as last time .

On October 21, 2019, the third quotation of LPR showed that the one-year LPR was 4.2% and the five-year LPR was 4.85%, which were all the same as the second quotation.

On November 20, 2019, the fourth quotation of LPR showed that the one-year LPR was 4.15%; the LPR for more than five years was 4.80%, which were lowered by 5 basis points.

On December 20, 2019, the fifth quotation of LPR showed that the one-year LPR was 4.15%; the LPR over five years was 4.8%, which was the same as last time.

On January 20, 2020, the sixth quotation of LPR showed that the one-year LPR was 4.15% and the five-year LPR was 4.80%, which were all the same as before.

On February 20, 2020, the seventh quotation of LPR showed that the one-year LPR was 4.05%, 10 basis points lower than the last time; the LPR for more than five years was 4.75%, 5 basis points lower than the last time.

On March 20, 2020, the eighth LPR quote showed that the one-year LPR was 4.05% and the five-year LPR was 4.75%, which were all the same as before.

Data sheet: LPR. Photograph by Xiong Xiyi, Zhongxin Jingwei

Experts: Don't rush to loose policy in one step

China-Thailand Securities Research Institute senior economist Yang Bestseller said to the client of China and Singapore that China ’s monetary policy has maintained its own strength and reserves space for future policy measures. At present, the market has not experienced a marked tightening of liquidity, and internal requirements for monetary policy adjustment are not high. Currently, it is still in the race between global epidemic and China's dynamics. It may face three rounds of shocks in the future. Financial market shocks, foreign trade shocks and employment shocks will require further efforts to hedge against domestic demand policies.

Senior Researcher of Minsheng Bank Research Institute Ying Xiwen said in an interview with the client of Xinjingwei that the central bank has not lowered the MLF interest rate after the RRR cut, so the LPR interest rate, which mainly refers to the MLF interest rate, has not been lowered this month. Unlike the European and American central banks, which are eager to finish the "king bombing", the easing of the People's Bank in this crisis is more rhythmic, because the European and American epidemic situation is still intensifying, has fallen into a liquidity trap, and deflation expectations are strong; It has improved, inflation expectations and aggregate social demand are gradually recovering, so there is no rush to easing policies in one step.

Wen Bin, chief researcher of China Minsheng Bank, believes that the core of current monetary policy and financial work is to maintain a reasonable and sufficient liquidity and further reduce the financing cost of the real economy . Under the circumstances that the MLF policy interest rate should not be changed frequently and the RRR cut effect is limited, given that corporate and residential sector deposits account for more than 60% of the bank's total debt, a timely and moderate reduction in the deposit benchmark interest rate will have a significant effect on the decline of LPR. With the gradual decline of China's inflation level and the resumption of quantitative easing monetary policies by central banks in major economies, China's monetary policy space has been opened. It is recommended that the benchmark deposit interest rate be lowered by 10bps in mid-April.

Wang Youxin, a researcher at the Bank of China Research Institute, believes that from the point of view, March can be considered to reduce the RRR first, and further cut interest rates in April. Affected by the suspension of production and production, the current domestic price index is relatively high, and monetary policy does not have the conditions for large-scale easing. It can guide LPR downwards in a comprehensive or targeted manner, reduce financing costs, and support enterprises to resume production and production. With the recovery of market supply and stable prices in April, further interest rate reduction measures can be considered to stimulate economic growth. (Zhongxin Jingwei APP)