Deal with the relationship between economic recovery and risk prevention——
Monetary policy adheres to the word "stable" (Rui Finance)
Recently, some market participants have closely linked the open market operations of the People's Bank of China with the trend of monetary policy and carried out "enlarged interpretations."
In this regard, the Monetary Policy Analysis Group of the People’s Bank of China clearly pointed out in its “China Monetary Policy Implementation Report” for the fourth quarter of 2020 released on the evening of February 8 that judging the trend of short-term interest rates first depends on whether the policy interest rate changes, and not Excessive attention should be paid to the number of open market operations.
The "Report" also emphasizes that a prudent monetary policy must be flexible, precise, reasonable and appropriate, adhere to a stable word, not make a sharp turn, grasp the timeliness and effectiveness of the policy, handle the relationship between economic recovery and risk prevention, and maintain a normal monetary policy space. Sustainability.
Prudent monetary policy has achieved remarkable results
The "Report" pointed out that 2020 is an extraordinary year, and the People's Bank of China has stepped up its macro policy response.
The prudent monetary policy is flexible, moderate and precise, adheres to the three deterministic directions of a moderate aggregate policy, a significant reduction in financing costs, and support for the real economy, and flexibly grasps the intensity, rhythm and focus of monetary policy control, in order to ensure the completion of a decisive victory and a comprehensive construction of a well-off society The society has created a suitable monetary and financial environment.
Specifically, there are several key points:
Adhere to scientific decision-making, and the monetary policy responds promptly and effectively.
In total, more than 9 trillion yuan of monetary support measures have been introduced through tools such as RRR cuts, medium-term lending facilities, refinancing, and rediscounting.
In terms of price, the medium-term lending facility and open market operation bid rate fell by 30 basis points in a forward-looking manner, driving the market interest rate center downward, and the 1-year loan market quote rate (LPR) simultaneously fell.
Insist on creative response, precise and direct support to stabilize enterprises and ensure employment.
According to the epidemic prevention and control situation and economic development needs, three batches of re-lending and rediscounting policies totaling 1.8 trillion yuan have been introduced at different levels and in gradients, innovating two monetary policy tools that directly reach the real economy, and continuously improving the structural monetary policy tool system .
Adhere to reform and opening up as the fundamental driving force, and deepen the market-oriented reform of interest rates and exchange rates.
Started as scheduled and successfully completed the conversion of stock floating-rate loan pricing benchmarks, actively promoted the use of LPR, resolutely broke the implicit lower limit of loan interest rates, and promoted a significant increase in the efficiency of interest rate transmission.
Improve the RMB exchange rate formation mechanism, increase exchange rate flexibility, and strengthen macro-prudential management.
Persist in taking the initiative to stabilize market expectations.
Pay attention to the management of expectations, improve the mechanism of monetary policy communication, and actively participate in international monetary policy coordination.
At the same time, adhere to the principle of marketization and rule of law, effectively prevent and control financial risks, and firmly hold the bottom line of avoiding systemic financial risks.
Precise guidance to support the real economy
So, how can a prudent monetary policy be "flexible, precise, reasonable and appropriate"?
The "Report" gives a clear answer: the comprehensive use of medium-term lending facilities, open market operations, re-lending, rediscounting and other monetary policy tools, while maintaining reasonable and sufficient liquidity, and also not engaging in "flooding"; guide market interest rates Focus on open market operation of interest rates and medium-term lending to facilitate interest rate fluctuations; innovate and improve the structural monetary policy tool system, accurately design incentive compatibility mechanisms, and guide financial institutions to increase support for related areas in line with new development concepts; insist on not using real estate as a The means to stimulate the economy in the short-term, insist on stabilizing land prices, housing prices, and expectations, and maintaining the continuity, consistency, and stability of the real estate financial policy...
Dong Ximiao, chief researcher of China Merchants Union Finance, told reporters that whether it is reverse repurchase or various lending facilities, the central bank actually uses it very frequently.
Especially at key points such as the end of the quarter or the end of the year, flexible use of these methods to ease the temporary liquidity tension in the market is a normal operation.
"This year, the prudent monetary policy must adhere to the "flexible, precise, reasonable and appropriate" eight-character policy. It can be seen that "precision" will be a more prominent feature of this year's monetary policy. In practice, the central bank is also expected to use more structured currencies. Policy tools, combining long-term and short-term, both volume and price, effectively adjust market liquidity and interest rate levels, drip liquidity more accurately to key areas and weak links, and increase support for technological innovation, small and micro enterprises, and green development." Dong Ximiao said .
The future will continue to focus on stability
Regarding how the monetary policy will reflect the word "stability" in the next period of time, the "Report" emphasizes that it is necessary to improve the money supply control mechanism, secure the total gate of the money supply, maintain reasonable and sufficient liquidity, and maintain the growth rate of money supply and the scale of social financing. Basically match the nominal economic growth rate, maintain the macro leverage ratio basically stable, and flexibly adjust the intensity, rhythm and focus of policies in accordance with changes in the situation.
According to Lian Ping, chief economist of Zhixin Investment, as China's economy takes the lead in recovering, the profitability of RMB assets is generally higher than that of US dollar assets. There are relatively more investment opportunities in China. The market demand for RMB is expected to continue to grow. Thus pushing up the RMB exchange rate.
In the future, monetary policy will continue to focus on stability.
Xu Gao, chief economist of Bank of China International, believes that overall, the new crown pneumonia epidemic still has a high degree of uncertainty, which continues to pose significant obstacles to economic operations.
In this uncertain environment, the main goal of domestic monetary policy is still to maintain economic growth and financial market stability, and it does not have the conditions for comprehensive tightening.
"From the analysis and discussion of the "Report", it is actually not difficult to grasp the overall idea of the current monetary policy. A prudent monetary policy is'flexible, precise, reasonable and appropriate', which means that corresponding measures will be taken in response to the different conditions of each stage of the macro economy. In this process, monetary policy needs to balance the short-term and long-term, the current cycle and the next cycle, and the dialectical relationship between the local and the whole. In this process, monetary policy needs to be balanced. It is undoubtedly one-sided to determine whether monetary policy is'relaxed' or'tightened' by the specific performance of a certain stage." Zhao Xijun, deputy dean of the School of Finance of Renmin University of China, said in an interview with our reporter.
Wang Junling