The central bank over-renewed MLF for three consecutive months. LPR quotes this month are likely to "stay in place"

　　Our reporter Liu Qi

　　Since the LPR reform, the central bank has gradually formed the practice of carrying out MLF operations in the middle of each month.

On October 15, the central bank's MLF operation "comes as scheduled."

On the same day, the central bank launched a 500 billion yuan MLF operation, and the operating interest rate remained unchanged at 2.95%.

This operation includes the continuation of the 200 billion MLF due on October 16, so the MLF has achieved an excess continuation, and the incremental funds have reached 300 billion yuan.

　　This operation is also the third consecutive month for the central bank to over-renew the MLF.

In this regard, Wang Qing, chief macro analyst at Oriental Jincheng, said in an interview with a reporter from the Securities Daily that the task of reducing structural deposits in banks in the fourth quarter is still heavy, and there is an urgent need to find alternative and stable funding sources, and there is a greater demand for MLF. .

Since the regulatory authorities demanded a reduction in structured deposits in June, as an alternative product, interbank deposit certificates have continued to "boost in volume and price." In September, the average interest rate on the issuance of 1-year joint-stock interbank certificates of deposit reached 3.02%; in October, 1 The interest rate for the issuance of inter-bank certificates of deposits with a period of joint-stock is still rising, rising to 3.13% on the 14th, which is significantly higher than the 1-year MLF operating interest rate (2.95%).

Under the effect of price comparison, banks are currently in great demand for MLF operations, which is an important reason for the excessive continuation of MLF this month.

Moreover, the over-renewal of the MLF in October also means that the central bank intends to curb the upward momentum of the medium-term market interest rate represented by the interbank deposit rate.

　　In the opinion of the chief analyst of fixed income at CITIC Securities, the central bank has gradually tightened currency since the end of April, liquidity has been reduced, government bond issuance has increased, credit has been extended, the pace of fiscal expenditure has been slow, and structural deposits have been reduced Under the multiple pressures of the Bank, the pressure on the debt side of banks has gradually emerged, the excess reserve rate has fallen, and the interest rate of interbank certificates of deposit has risen rapidly.

In October, the central bank continued its large-scale MLF operations to ease the pressure on banks' liabilities.

In the context of the continued pressure drop in structural deposits during the year and the low excess reserve rate, it is expected that the MLF excess continuation will become the norm.

　　On the same day as the MLF operation, the central bank also launched the first reverse repurchase operation in October. The operation period was 7 days, the operation volume was 50 billion yuan, and the winning bid rate remained unchanged at 2.2%.

Since there was no reverse repurchase expiration on October 15, all net releases were realized on that day.

　　"With the impact of monetary policy from responding to the turmoil of the epidemic to returning to normal, and superimposing the impact of government bond issuance before the end of October this year, the market capital situation in recent months, especially the tightness of long-term funds, yields on 10-year government bonds. Wen Bin, chief researcher of Minsheng Bank, told a reporter from the Securities Daily that for this reason, the central bank has increased its open market operations and adopted a combination of “reverse repo + MLF” to keep short-term market interest rates at the central bank’s policy interest rate. Nearby, on the other hand, the MLF has been over-delivered in the last three months to maintain the overall stability of the market's long-term interest rate level and meet the needs of financial institutions to increase support for the real economy and reduce financing costs.

　　Based on the anchoring effect of MLF, under the circumstance that the interest rate of the MLF operation carried out on October 15 remains unchanged, the possibility of lower LPR quotations in October will decrease.

Wang Qing believes that since September last year, the two have kept synchronized adjustments.

Although the short-term market interest rate represented by DR007 has not risen since August, the medium-term market interest rates such as the issuance rate of interbank certificates of deposit are still rising, which may hedge the impact of the decline in the cost of liabilities such as bank structured deposits and large certificates of deposit. Recently, the average marginal cost of funds of banks has hardly seen a significant decline, and the quoting banks have insufficient motivation to lower their October LPR quotations.

It is therefore expected that the LPR quotations for 1-year and 5-year or more announced on the 20th of this month will likely remain unchanged.

　　Looking back on the trend of LPR quotations this year, according to the "Securities Daily" reporter combed, in January this year, LPR quotations for 1-year and 5-year periods were 4.15% and 4.8% respectively; in February, both fell to 4.05% and 4.75% respectively; The previous value remained unchanged in March; the downward trend resumed in April, and the LPR quotations for 1-year and 5-year periods were 3.85% and 4.65% respectively.

Then until September of this year, both maintained their April quotations unchanged.

Overall, since the beginning of this year, the 1-year LPR quotation has dropped by 30 basis points, and the 5-year LPR price has dropped by 15 basis points.

　　For comparison, the interest rate of the MLF operation. The interest rate of the MLF operation carried out by the central bank on January 15 this year was 3.25%, the interest rate of the MLF operation carried out on February 17 was reduced to 3.15%, and the interest rate of the MLF operation carried out on March 16 remained unchanged at 3.15%. The interest rate of the MLF operation carried out on April 15 was lowered to 2.95%, and the interest rate of the MLF operation carried out from May to September remained at 2.95%.

During the year, the MLF operating interest rate fell by 30 basis points.

　　In response to the level of LPR interest rates, Sun Guofeng, Director of the Monetary Policy Department of the Central Bank, said at a recent press conference on financial statistics for the third quarter of 2020 held by the Central Bank. In the first four months of this year, due to changes in the economic situation, especially the impact of the epidemic, the Central Bank has made forward-looking guidance. The market operation winning interest rate and the MLF winning interest rate fell by 30 basis points, driving the one-year LPR to also decline simultaneously, and pushing the loan interest rate down significantly.

In recent months, as the epidemic has been effectively controlled, the domestic economy has recovered well. Both the central bank’s policy interest rate and the loan market quote interest rate LPR have remained stable. The market interest rate revolves around the central bank’s policy interest rate. The interest rate level is generally consistent with the current economic fundamentals. matched.

(Securities Daily)