LPR unchanged for 8 consecutive months does not affect the decline in corporate loan interest rates

  Our reporter Yao Jin

  On December 21, the new loan market quote rate (LPR) was released.

The 1-year LPR was 3.85%, and the 5-year or more LPR was 4.65%, which was the same as the previous period.

So far, the quoted interest rates of the two loan markets have remained unchanged for 8 consecutive months.

  Wang Qing, chief macro analyst at Oriental Jincheng, said that LPR quotations in December remained unchanged in line with market expectations.

On the 15th of this month, the central bank renewed the 1-year medium-term lending facility (MLF) excessively, and the bidding rate was 2.95%, the same as the previous month.

This means that the reference basis for LPR quotations in December has not changed.

Since September last year, the 1-year LPR quotation and the 1-year MLF bidding rate have always been adjusted simultaneously, and the interest rate spread between the two has been fixed at 90 basis points.

  "In addition, the short-term market interest rate represented by the 7-day pledged repo rate (DR007) of depository institutions has basically fluctuated around the short-term policy interest rate recently, but the medium-term market interest rate such as the issuance rate of interbank certificates of deposits remains high. This will to a certain extent. To offset the impact of the decrease in the cost of liabilities such as bank structured deposits and large certificates of deposit, it means that the average marginal cost of funds of banks is unlikely to decline significantly in the near future, and the quoting banks have insufficient motivation to lower the 1-year LPR quotation in December. Qing thinks.

  Zhou Maohua, an analyst at the Financial Markets Department of Everbright Bank, believes that the domestic monetary policy remains stable and continues to provide strong support for economic recovery.

In recent months, the domestic economy has recovered well. Broad money (M2) and the scale of social financing have maintained a relatively high growth rate. The demand for financing in the real economy is strong, indicating that the current interest rates and money and credit supply are reasonable and appropriate.

From the perspective of bank liabilities and operating pressures, quoting banks are more willing to maintain "additional" stability.

  Will the continuous maintenance of LPR offer resistance to the decline of corporate loan interest rates?

Wang Qing said that since May, the supervisory authorities have focused on reducing the burden of the financial system on the real economy by 1.5 trillion yuan, aiming to prevent "overflowing flooding", while focusing on the implementation of "directed drip irrigation" for manufacturing and small, medium and micro enterprises.

This means that the LPR quotation remains unchanged will not have a substantial impact on the downward trend of corporate loan interest rates.

Banks can reduce the actual financing costs of enterprises by lowering the "plus points" in the pricing of corporate loan interest rates.

  It is worth noting that the central bank restarted the 14-day reverse repurchase operation on December 21, with a volume of 100 billion yuan.

In this regard, Zhou Maohua believes that the central bank launched a 14-day reverse repurchase operation, mainly to protect cross-season and cross-year funding and stabilize market expectations.

Since the central bank has over-renewed the MLF and invested ample long-term funds into the market, it has eased the overall debt pressure of banks to a certain extent. In the short-term, the central bank has maintained stable market liquidity by matching open market operation tools with different periods.

  “Next, the key to the adjustment of the central bank’s policy interest rate is to look at the macroeconomic and market development trends, and pay attention to the recovery of domestic demand and the financing needs of the real economy. Monetary policy should focus on the balance between stable growth and risk prevention, and reform measures should be used to further clear the transmission of monetary policy and improve Policy quality and effectiveness. From the perspective of the domestic economic recovery trend, the probability of the central bank lowering the policy interest rate in the first quarter of next year is still low." Zhou Maohua said.

  Wang Qing said that focusing on the “implementation of normal monetary policy for as long as possible” proposed in the third quarter monetary policy implementation report, if there are fluctuations in the macroeconomic operation in the future, the central bank will give priority to maintaining the stability of policy interest rates, and promote the trend of market interest rates. The LPR quotation adjustment method changes the financing cost of enterprises and implements counter-cyclical adjustment.