Zhongxin Finance, January 21 (Shi Ruigong Hongyu Zuo Yukun) cut interest rates again!

In a month's time, "Yangma" lowered the 1-year LPR (loan market quoted interest rate) twice in a row, a total of 15 basis points, and the 5-year LPR was lowered for the first time in 20 months. What is the impact on the economy, property market, stock market, etc.?

Data map: A real estate in Shanxi.

Photo by Gao Ruifeng

Send a steady growth signal

  On January 20, the National Interbank Funding Center announced the loan market quoted interest rate (LPR) for this month. The one-year LPR was 3.7%, down 10 basis points from the previous month; the LPR for more than 5 years was 4.6%, compared with the previous month. Down 5 basis points.

Among them, the 1-year LPR set a record of two consecutive months of decline, and the 5-year or more LPR ended the 20 consecutive months of "standstill".

  Dong Ximiao, chief researcher of China Merchants Union Finance, told Zhongxin Finance that the LPR dropped asymmetrically this month, which was basically in line with expectations.

  "First, the drop in the medium-term lending facility (MLF) bid interest rate has driven the decline in LPR. Second, the reduction in the cost of banks' capital has pushed banks to reduce the number of additional points. Since last year, the central bank has implemented two comprehensive RRR cuts, and has increased supervision on deposit interest rates and optimized deposit interest rates. The method of determining the upper limit of self-discipline has effectively reduced the cost of funds for banks, allowing banks to reduce the number of additional points.”

  Dong Ximiao analyzed that the asymmetric decline of LPR this month has positive significance in three aspects.

  First, to further transmit a signal of steady growth.

"Confidence is more important than gold", and the recent continuous adjustment of monetary policy has produced a superimposed effect, which will help restore market players' expectations and confidence in the future, stimulate market investment demand, and promote steady economic growth.

  Second, guide financial institutions to reduce the credit cost of market entities.

Both 1-year and 5-year LPRs have fallen, and the newly added short-term and medium- and long-term loan interest rates are expected to further decline, which will directly benefit real enterprises.

  Third, it helps to better prevent financial risks.

In November and December last year, the growth rate of bank credit lending declined. The "starter" in January was not ideal, and some banks even experienced "asset shortage".

Risks to the banking system will also increase if the credit contraction is not reversed.

  "From the perspective of timing, before the United States accelerates its tightening of monetary policy, the time window for LPR to decline this month is more suitable, which will give my country the active space to deal with the risk of financial policy spillovers in developed economies." Dong Ximiao said.

Save money when you buy a house "just in need"

  In the second half of 2021, the risks of individual real estate companies will become explicit. Affected by this, the risk aversion of various real estate entities has increased, financial institutions have experienced short-term stress reactions, the credit environment for home purchases has been relatively tightened, and some “just need” groups have applied for housing. Loan cycle lengthened.

Data map: Bank staff are counting renminbi.

  After the rare "double interest rate cut" by LPR, Yan Yuejin, research director of the Think Tank Center of E-House Research Institute, said that the central bank's interest rate cut policy will have a positive impact on the real estate market. In conclusion, it will help boost the prosperity of the real estate market.

  "From the perspective of real estate enterprises, the cost of medium and long-term loan capital will be further reduced, which will encourage real estate enterprises to be willing to lend and dare to lend, and better activate real estate enterprises' willingness to invest and start new construction in 2022." Yan Yuejin said, "From the perspective of home buyers , the mortgage interest rate cost is further lowered, which will further activate the reasonable housing consumption demand and activate the transaction market.”

  "The average mortgage interest rates in 103 key cities have been adjusted for 4 consecutive months, and the room for decline has expanded compared with the previous month, and the lending cycle has been further shortened." According to the Shell Research Institute, in January, the mainstream first-home mortgage interest rates in the 103 key cities it monitored were The second set of interest rates were 5.56%, and the second set of interest rates were 5.84%, both down 8 basis points from the previous month; the average lending cycle this month was 50 days, 7 days shorter than the previous month.

  Among them, the mainstream interest rates of housing loans in 59 cities were lowered month-on-month, an increase of 19 from the previous month. Among them, key cities such as Guangzhou, Shenzhen, Hangzhou, Nanjing, Suzhou and other key cities have lowered their mortgage interest rates.

In terms of loan cycle, the loan cycle in 64 cities was shortened compared with the previous month, and the bank loan in 4 first-tier cities was accelerated. Guangzhou was shortened by more than 40 days compared with the previous month, Beijing was shortened from 12 days to less than 70 days on average, Hefei, Wuhan, Hangzhou and Nanjing. Second-tier cities such as Xiamen, Chengdu and other second-tier cities have shortened the average loan period by more than 20 days.

  Yan Yuejin believes that the interest rate cut by the central bank will be further transmitted to the housing loan market. Taking a mortgage loan with a loan amount of 1 million yuan and a 30-year equal principal and interest repayment as an example, before the interest rate adjustment, the 5-year LPR was 4.65%. The monthly payment is 5156 yuan.

After the interest rate adjustment, the LPR is 4.60%, and the monthly payment is 5,126 yuan.

In this way, the monthly payment is reduced by about 30 yuan.

  "If you consider that commercial banks will have more loanable funds in the future and there is room for further reduction in interest rates, the effect of reducing the burden will be more obvious." (End)