Liquidity will remain basically stable after the RRR cut
Our reporter Yao Jin
In the past week (July 6-12), the People's Bank of China continued to carry out reverse repurchase operations of 10 billion yuan on each trading day, with a period of 7 days, and the winning bid rate remained unchanged at 2.20%.
Although on July 9th, the People’s Bank of China announced that it would lower the reserve requirement ratio of financial institutions by 0.5 percentage points, the overall RRR cut slightly exceeded market expectations, but expert analysis believes that the overall RRR cut is still a routine liquidity operation after the return of monetary policy to normal. , The orientation of prudent monetary policy has not changed.
In terms of funding, on July 12, the Shanghai Interbank Offered Rate (Shibor) went down almost across the board, and only the 2-cycle varieties rose slightly by 4.40 basis points.
Specifically, overnight varieties reported 1.9400%, down 26.60 basis points; 1-cycle varieties reported 2.1630%, down 5.70 basis points; 1-month varieties reported 2.3390%, down 1.20 basis points.
Wang Yiming, a member of the Monetary Policy Committee of the People's Bank of China, said that after the RRR cut, the banking system will continue to maintain reasonable ample liquidity.
Part of the funds released by the RRR cut can be used by financial institutions to return the maturing medium-term loan facility (MLF). For example, the MLF maturity in July was 400 billion yuan.
In addition, the tax scale in July is relatively large, and the pace of subsequent government bond issuance may also accelerate. These are all factors that consume liquidity.
The liquidity released by the RRR cut can be appropriately hedged against these factors, and the total liquidity will remain basically stable.
Wang Yiming also pointed out that the RRR cut can improve financial service capabilities and better support the real economy.
In recent years, with the significant increase in credit allocation to the real economy, the banking system has long-term funding needs, and routine liquidity operations need to cover this demand.
The RRR cut will release part of the frozen long-term liquidity. While maintaining reasonable and sufficient liquidity, financial institutions can allocate funds according to the needs of the real economy to better match the financing needs of the real economy.
"The central bank's RRR cut will release long-term, low-cost funds, guide banks to further reduce the financial costs of small and micro private enterprises, and effectively hedge against the continued upward pressure on commodity prices; at the same time, increase long-term capital investment in the manufacturing industry, stabilize corporate development confidence, and stimulate micro entities Vitality, to ensure the main body of the market, to promote employment and the recovery of domestic demand." said Zhou Maohua, an analyst at Everbright Bank.
The purpose of this RRR cut is to optimize the capital structure of financial institutions, improve financial service capabilities, and better support the real economy.
However, some people are still worried about whether the RRR cut funds will flow into real estate, pushing up housing prices?
In this regard, Zhou Maohua believes that the RRR cut will not affect the stability of the property market.
On the one hand, the RRR cut is not equivalent to "overflow irrigation". The executive meeting of the State Council clearly pointed out that it is necessary to maintain the stability and effectiveness of monetary policy on the basis of insisting on not engaging in flood irrigation. Adhere to the positioning of "housing to live without speculation", localities continue to implement the "three stability" task of the property market, real estate control policies maintain a high-pressure situation, and resolutely curb speculation and speculation.
"The RRR cut has no direct impact on the real estate market. The RRR cut emphasizes not to engage in flood irrigation, but precise drip irrigation. In real estate, we still insist on housing and housing, not speculation, and implementing policies based on the city. The RRR cut is more focused on the real economy and support Key areas and weak links." said Wen Bin, chief researcher of China Minsheng Bank.
Lian Ping, chief economist and dean of the Institute of Zhixin Investment, said that although the overall RRR cut seems to be a total tool, it has already regulated the direction of credit investment.
The route is clear: one is to support the production and operation of small, medium and micro enterprises and reduce their financing costs; the other is to support key national projects, such as key local projects where local governments issue special bonds, and most of the debt buyers are commercial banks.
For real estate, the commercial bank real estate loan concentration management system has been launched for half a year. After the overall RRR cut, there is no possibility of credit funds directly entering the real estate market.
Yao Jin
Yao Jin