Increase the amount without price increase! What is the meaning of the central bank's continuation of 650 billion yuan MLF? How will liquidity go?

　　The new issue of "Spicy Rice Noodles" is on the table.

On December 15, according to the announcement on the official website of the central bank, in order to maintain reasonable and sufficient liquidity in the banking system, the central bank will carry out a 650 billion yuan medium-term lending facility (MLF) operation and a 2 billion yuan open market reverse repurchase operation on December 15, 2022. Meet the needs of financial institutions.

The winning bid rates were 2.75% and 2%, respectively, both unchanged from before.

　　Compared with the amount due in December and the previous interest rate, the central bank's MLF has realized "increasing the volume without increasing the price" this month.

Investigating the reasons, there are both market factors and seasonal factors.

But at the same time, the orientation of monetary policy to exert reasonable, moderate and forward-looking efforts remains unchanged.

November MLF expansion parity

　　Wind data shows that on December 15, 500 billion yuan of MLF and 2 billion yuan of reverse repos expired.

Based on this calculation, the MLF operation achieved a net investment of 150 billion yuan this month, and the interest rate remained unchanged for the fourth consecutive month.

In addition, in August 2022, the central bank lowered the bidding rates of MLF and reverse repurchase by 10 basis points at the same time.

　　This month, the MLF "expansion volume parity" continued, slightly exceeding market expectations.

On December 5, the central bank officially implemented a comprehensive RRR cut, releasing 500 billion yuan of long-term funds.

Many market participants believe that the central bank may continue to shrink in December.

　　Talking about the operation of MLF this month, Zhou Maohua, a macro researcher at the financial market department of China Everbright Bank, pointed out that the excess of MLF in December was mainly due to the impact of short-term factors in China and the downward pressure on the economy. The central bank guides financial institutions to increase support for the real economy. Help wide credit; the recent rapid rise in interest rates on interbank certificates of deposit has also pushed up the demand for MLF to a certain extent; approaching the end of the year, moderately increase liquidity to stabilize market expectations.

　　Zhou Maohua said that parity is mainly because the short-term market interest rate is in a reasonable range as a whole. The central bank and other departments are actively guiding financial institutions to reduce the weak links of small and micro enterprises and the financing costs of key emerging areas through structural tools and reform means; at the same time, taking into account the external balance .

　　Wang Hao, a senior macro researcher, further explained that there are three main considerations for the central bank to increase the scale of MLF sequels this month.

First of all, the middle of the month coincides with the deposit-type financial institution’s payment and the expiration of the previous MLF. At this time, increasing the scale of the sequel will help smooth the current price fluctuations of funds.

Secondly, after half a month, depository financial institutions will face the year-end MPA (Macro Prudential Assessment System) assessment, and liquidity will tighten seasonally.

A moderate release of liquidity at this time will help improve the expectations of financial institutions.

　　"Finally, the Lunar New Year in 2023 will be earlier, and the production and operation activities of the real economy sector in the new year will also be advanced accordingly." Wang Hao added, therefore, the early release of some liquidity will help decision makers in the real economy sector reasonably arrange production in the new year. Operation and investment and financing plan.

　　In addition, Wang Hao suggested that the central bank’s previous RRR cuts, full repurchase of special government bonds, and this excess sequel MLF should be viewed together.

The three measures released a total of about 1.4 trillion yuan of new liquidity.

This reflects that the monetary policy has not changed its orientation of making reasonable and moderate efforts and making efforts at the front.

Pay attention to the possibility of future inflation

　　Looking back at the several MLF operations in the second half of 2022, most of them are sequels with reduced volume as a whole, and only October is an equal amount operation.

At the same time, when operating MLF in November, the central bank also mentioned in the announcement that since November, the central bank has invested 320 billion yuan in medium and long-term liquidity through tools such as mortgage supplementary loans (PSL) and technological innovation refinancing.

　　After entering the fourth quarter, the market capital is in a neutral to tight state, and the central bank controls the upward trend of market interest rates through a number of tools.

Recently, the marginal capital cost of banks has risen rapidly, and short-term interest rates have fluctuated.

On December 15, according to data from the China Foreign Exchange Trading Center, the overnight Shibor was at 1.2230%, up 2.4 basis points; the 7-day Shibor was at 1.6260%, down 4.3 basis points; the 14-day Shibor was at 1.7450%, up 1.3 basis points.

　　In addition, according to the latest financial statistics for November, broad money (M2) grew by 12.4% year-on-year during the reporting period, the highest since April 2016.

　　Comprehensive market liquidity situation, Wang Hao pointed out: "Because of the annual MPA assessment at the end of the year, the liquidity in the market will obviously flow back to depository financial institutions. At the same time, the capital demand side needs to borrow liquidity to supplement deposits or maintain asset-side leverage. Therefore, the central bank's moderately excessive MLF will help ease the seasonal supply and demand tension in the money market."

　　Pang Ming, Chief Economist and Director of Research Department of Jones Lang LaSalle, said that the central bank has recently invested a large amount of medium and long-term liquidity through tools such as PSL and technological innovation re-lending, and a variety of short-, medium- and long-term monetary policy tools Used together, it not only maintains the strength of liquidity injection, but also satisfies the reasonable needs of financial institutions for funds with different maturities. It also helps to support financial institutions to increase credit extension to the real economy, especially key areas, fully explaining the liquidity Sexual investment better handles the relationship between short-term market stabilization and long-term structural adjustment.

　　Pang Ming emphasized that one should be vigilant that the M2 growth rate, which has reached a high point in recent years, will continue to run at the current level for a period of time.

With the stabilization and recovery of China's macro economy, the basic restoration of supply and demand, and the gradual recovery and strengthening of demand, it will bring about the rapid release of consumption momentum, higher demand prices for goods and services, and an overall rise in the price center. We should attach great importance to the potential for future inflation to heat up. Prudent use of price-based monetary policy tools is also reflected in the central bank's equivalent sequel MLF.

Continue to maintain a relaxed balance

　　After the operation of the MLF was released, the trend of the loan market quotation rate (LPR) this month is still one of the focus topics in the market.

As the anchor of LPR pricing, the MLF interest rate remains unchanged. There are different market views on whether LPR is expected to change this month.

　　In Wang Hao's view, with the MLF interest rate remaining unchanged, the probability of LPR interest rate changes this month is small.

　　Wang Qing, chief macro analyst at Oriental Jincheng, believes that commercial banks have launched a new round of deposit rate cuts since September, and the implementation of the RRR cut in December will also reduce the cost of funds for financial institutions by about 5.6 billion yuan per year, which is expected to offset recent market interest rates The impact of the rise will increase the motivation of the quotation line to lower the LPR quotation and add points.

It is judged that the regulator will guide the quotation banks to lower the 5-year LPR in the near future, which may be implemented as early as the 20th of this month, and the possibility of lowering the 5-year LPR by January 2023 is not ruled out.

　　In the third-quarter monetary policy implementation report released by the central bank, it is mentioned that it will play an important role in the market-based adjustment mechanism of deposit interest rates, focus on stabilizing the cost of bank liabilities, release the efficiency of loan market quotation interest rate reform, and promote the reduction of corporate financing and personal consumption credit costs.

　　For the next stage of monetary policy and market liquidity trends, Pang Ming predicts that future policy operations will continue to maintain an overall steady and moderate rhythm, and market liquidity will continue to maintain a loose and balanced situation at the end of the year, and open market operations will continue to maintain systematic coordination. Precise regulation, the gradual return of the fund rate to the policy rate remains unchanged, the determination of the central bank to maintain reasonable and sufficient liquidity and the tone of the precise and powerful monetary policy remain unchanged.

　　Pang Ming said that the follow-up monetary policy will comprehensively use a variety of monetary policy tools, optimize the policy mix, and focus more on the deployment, use, and reinforcement of structural monetary policy tools, so as to facilitate monetary policy and liquidity. Sexual delivery and credit transmission are more precise, efficient, and scientific, so as to achieve precise, sufficient, and forward-looking efforts.

　　At the same time, maintain a reasonable and sufficient state of liquidity, keep the market interest rate running smoothly, further guide the policy interest rate downward, and strive to lower the capital cost of financial institutions and reduce the interest rate of inclusive small and micro loans and relatively high-cost mortgage loans among existing loans. , drive the comprehensive financing cost of the real economy, corporate loan interest rates, and personal consumption credit costs to decline steadily, maintain a reasonable increase in the money supply and social financing scale, and strive to achieve better results in economic operations.

　　Beijing Business Daily reporter Liao Meng