China News Service, Beijing, February 18 (Reporter Xia Bin) The People's Bank of China announced on the 18th that in order to maintain reasonable and sufficient liquidity in the banking system, it would carry out 105 billion yuan (RMB, the same below) open market reverse repurchase operations and 500 billion yuan of medium-term lending facility (MLF) operations, with interest rates maintained at 1.8% and 2.5% respectively, both unchanged from before.
Taking into account that 499 billion yuan of one-year MLF expired that day, the People's Bank of China achieved a net investment of 1 billion yuan in February through this "volume increase and price parity" MLF renewal.
Pang Ming, chief economist and director of the research department of Jones Lang LaSalle Greater China, told a reporter from China News Service that from a price point of view, renewing the MLF at a fair price and keeping the policy interest rate stable will help maintain the liquidity and stability of the banking system. Money market interest rates are running smoothly, and we are patiently waiting for the policy of lowering reserve requirements and "targeted interest rate cuts" to take effect. At the same time, it can avoid overlapping and overshooting of policy effects in the short term, and it is also conducive to accumulating strength to ensure that the next stage matches various monetary policy patterns, cooperates with fiscal policies, and ensures the smooth issuance of government bonds.
From a volume perspective, Pang Ming pointed out that although this month's MLF has been the 15th consecutive month of increased volume and oversubscription, the net investment scale of 1 billion yuan is significantly lower than the market's previous expectations, indicating that the policy orientation emphasizes preventing capital arbitrage. and idling, improve the efficiency of monetary policy, and promote the steady downward movement of the center of capital interest rate fluctuations.
The chief economist of CITIC Securities clearly mentioned that even if the MLF interest rate does not move, the loan prime rate (LPR) that will be announced later may also fall. Compared with the MLF interest rate, whether the financing costs of real economic entities can be reduced is more important for economic growth, and in this regard, the actual significance of LPR is stronger. Whether LPR can decline depends on whether banks' capital costs can decline. Deposit costs are an important factor affecting banks' capital costs.
Pang Ming also predicts that the probability of lowering the MLF interest rate and the reverse repurchase rate in the short term is low. However, since the LPR is expected to loosen and decline under the guidance of market interest rates and the central bank, a reduction in the LPR cannot be ruled out in the short term. possibility. (over)