In September, the LPR "does not move" monetary policy still has room for development

　　Peng Yang

　　"Since the reform of the loan market quoted rate (LPR), the corporate loan interest rate has dropped from 5.32% in July 2019 to 4.05% in August 2022, the lowest level since statistics." The latest data disclosed by the Monetary Policy Department of the People's Bank of China shows that , the efficiency of LPR reform continued to be released, and the financing cost of enterprises continued to decrease.

　　In the eyes of industry insiders, although the new phase of LPR announced on September 20 is “on hold” after the drop in August, the cumulative effect of previous declines will continue to appear.

At the same time, the possibility of further adjustment of the LPR still exists as the cost of debt of commercial banks is stable and falling.

The cumulative effect continues

　　On September 20, the People's Bank of China authorized the National Interbank Funding Center to announce that the LPR for a one-year term was 3.65%, and the LPR for a term of more than five years was 4.30%, both the same as the previous issue.

　　According to reports, my country has formed an interest rate transmission mechanism of medium-term lending facility (MLF) interest rate - LPR - loan interest rate, and the MLF interest rate plays a key role in guiding LPR quotations.

In September, the People's Bank of China reduced the volume and continued to expire MLF, and the operating interest rate was the same as that of the previous month, which means that the basis of LPR quotation in September did not change.

　　Wang Qing, chief macro analyst at Oriental Jincheng, analyzed that since the LPR reform in August 2019, it is very rare for the LPR to decline for two consecutive months.

At the same time, after the asymmetric decline of LPR in August, it is currently in the effect observation period.

The current LPR remained unchanged in line with market expectations.

　　It is worth mentioning that the LPR has declined many times this year, and the cumulative effect continues to appear.

According to a reporter from China Securities Journal, since the beginning of this year, the 1-year LPR and the 5-year LPR have dropped by 15 basis points and 35 basis points respectively, driving the interest rate in the credit market to continue to decline.

　　"LPR is formed by bank quotations, which can more fully reflect the changes in market supply and demand, and has a higher degree of marketization. In the context of the overall decline in market interest rates, it is conducive to promoting the reduction of actual loan interest rates." The Monetary Policy Department of the People's Bank of China issued a document on the central bank's website. pointed out.

Continue to release the efficiency of LPR reform

　　Looking forward to the follow-up, experts said that some banks have recently lowered deposit rates to open up space for further adjustments to the LPR.

　　"In mid-September 2022, state-owned commercial banks voluntarily lowered the deposit interest rate, which led other banks to follow the adjustment. Many of these banks adjusted the deposit listing interest rate for the first time since October 2015. This is the bank's strengthening of asset and liability management and stabilizing the cost of liabilities. Active behavior," said the Monetary Policy Department of the People's Bank of China.

　　Wen Bin, chief economist of Minsheng Bank, said that while the effect of guiding the decline in deposit interest rates is gradually emerging, continue to guide the decline of LPR with a maturity of more than 5 years, support infrastructure construction, manufacturing investment and the recovery of the real estate market, and promote effective demand for credit. Recovery is very important.

　　Wang Yunjin, a senior researcher at Zhixin Investment Research Institute, believes that the current 1-year LPR has dropped to 3.65%, which is even lower than the medium- and long-term deposit interest rates and large-denomination certificates of deposit interest rates of individual banks, and the room for further decline may be limited.

In contrast, LPR with a maturity of more than 5 years has more room for adjustment, and further reducing the LPR of this period will help to leverage the supporting financing of key infrastructure projects, medium and long-term loans for manufacturing and personal mortgage loans, and further optimize the credit structure. , stimulate long-term investment demand.

　　At present, my country's economy is in an important window period of stabilization and recovery.

In the opinion of many experts, my country's monetary policy still has room to exert its strength.

Dong Ximiao, chief researcher of China Merchants Union Finance, believes that monetary policy will continue to intensify its implementation from various aspects, boost confidence and expectations more effectively, and promote economic growth more effectively.

Pang Ming, chief economist of Jones Lang LaSalle Greater China, said that considering that the net interest margin of commercial banks has fallen to a low level and a large number of MLFs will expire in the fourth quarter, it is not ruled out that the People's Bank of China will replace some expired MLFs through RRR cuts in the future. In order to reduce the cost of bank liabilities and pressure on interest margins, ease the constraints of credit expansion, continue to dredge the monetary policy transmission mechanism, release the effectiveness of monetary policy, consolidate the foundation for economic recovery and development, and enhance development momentum.

　　"In the next stage, the People's Bank of China will implement a prudent monetary policy, strengthen the foundation of economic recovery and development, and will not flood the future or overdraft the future, and take concrete actions to welcome the victory of the Party's 20th National Congress." Deputy Governor of the People's Bank of China Liu Guoqiang said recently.

　　According to the Monetary Policy Department of the People's Bank of China, the next step will continue to deepen the reform of interest rate marketization, continue to release the efficiency of the LPR reform, strengthen the supervision of deposit interest rates, give full play to the important role of the market-oriented adjustment mechanism of deposit interest rates, promote the improvement of the degree of interest rate marketization, and improve marketization. Interest rate formation and transmission mechanism, optimize the central bank's policy interest rate system, give full play to the adjustment role of the interest rate lever, promote the optimal allocation of financial resources, and create a favorable environment for high-quality economic development.