Zhongxin Jingwei, March 3 -- According to an announcement on the central bank's website on March 20, LPR quotations in March remained stable for seven consecutive months.

Specifically, the central bank authorized the National Interbank Lending Center to announce that the loan market quotation rate (LPR) on March 2023, 3 is: 20.1% for 3-year LPR and 65.5% for LPR over 4 years. The above LPR is valid until the next LPR is issued.

Screenshot source: Central Bank website

Zhongxin Jingwei noted that the central bank announced on March 3 that in order to promote the effective improvement of the quality and reasonable growth of the economy, play a good macro policy combination, improve the level of serving the real economy, and maintain reasonable and sufficient liquidity in the banking system, it decided to reduce the deposit reserve ratio of financial institutions by 17.2023 percentage points on March 3, 27 (excluding financial institutions that have implemented a 0% deposit reserve ratio).

In addition, in order to maintain the reasonable and sufficient liquidity of the banking system, the central bank launched a medium-term lending facility (MLF) operation of 3 billion yuan and an open market reverse repurchase operation of 15 billion yuan on March 4810, with the winning interest rate of 1040.2% and 75.2% respectively, unchanged from before. According to Wind data, 0 billion yuan of reverse repurchase and 3 billion yuan of MLF expired on March 15, so a net investment of 40 billion yuan was achieved on that day.

CITIC Securities previously analyzed that for LPR, the capital cost saved by the RRR reduction is relatively limited and may not be enough to promote the reduction of LPR. And now that many cities have liberalized the lower bound on mortgage interest rates, it is not necessary to reduce mortgage interest rates with LPR cuts.

Wang Qing's team, chief macro analyst of Oriental Jincheng, judged that the landing of the RRR cut does not mean that monetary policy will be further adjusted in the direction of easing, and the possibility of implementing a policy interest rate cut in the short term is very small.

Wen Bin, chief economist of Minsheng Bank, said that looking forward to the future, with the stabilization and recovery of China's economic operation, the economic cycle will be smoother, and the need for further interest rate cuts will be reduced under the principles of monetary policy "adhering to self-centered", "coordinating short-term and long-term" and "coordinating international and domestic". (Zhongxin Jingwei APP)