Recently, the issuance of interbank certificates of deposit has shown a trend of simultaneous increase in volume and price.
As of March 25, the issuing interest rate of one-year AAA interbank certificate of deposit of China bond commercial bank rose by 7.5bp The interest margin between one-year large state-owned interbank certificates of deposit and one-year MLF was 23bp, which was significantly narrowed compared with the same period last month.
Insiders believe that this is mainly due to the increased pressure on the liability side of commercial banks and the impact of fund and financial redemption.
“At present, the yield curve of interbank certificates of deposit moves up sharply as a whole, the cost of bank liabilities rises, and the demand for long-term funds is more obvious. Compared with the reduction of the reserve requirement last year, we believe that the central bank may reduce the reserve requirement in the near future.” Citic Securities Company Limited(600030) co chief economist Mingming said.
bank debt pressure rebounded, and the demand for inter-bank certificate of deposit financing increased
According to statistics, as of March 25, interbank certificates of deposit issued in March totaled 1914.9 billion yuan, 1902.6 billion yuan in the same period last month, while only 910.7 billion yuan was issued in the same period in January. Since March, the issuing rates of three-month, six-month and one-year AAA interbank certificates of deposit of China bond commercial bank have increased by 5.5, 7.3 and 7.5 BP respectively.
The rise in the issuance scale of interbank certificates of deposit reflects the increasing pressure on the liability side of banks. Many experts said that after the failure of the expectation of interest rate cut in February, banks’ demand for long-term funds increased, coupled with factors such as credit extension, which led to an increase in banks’ demand for interbank certificate of deposit issuance.
“The debt pressure of commercial banks has picked up. Affected by the ‘full force and forward force’ of financial policies, the credit data was strong in the beginning of the year. In order to alleviate the debt pressure of commercial banks, there is a high demand for interbank certificate of deposit financing.” Said Zhou Yue, chief analyst of Zhongtai Securities Co.Ltd(600918) fixed income.
Mingming said that from the demand side, the allocation power is weakened under the redemption pressure. “The monetary fund is an important allocator of inter-bank certificates of deposit. The decline in the growth rate of goods base scale has relatively weakened the demand for inter-bank certificates of deposit. In addition, due to the previous rise in the yields of treasury bonds and CDB bonds, the attraction of inter-bank certificates of deposit has declined relatively.” Say it clearly.
Zhou Yue said that the marginal convergence of capital and the strengthening of credit expectation. Affected by the large issuance of local bonds, the net return of the central bank’s open market and the factors at the end of the quarter, the capital interest rate has increased. In addition, the deregulation of real estate policies has been strengthened, the strong credit data has pushed up the credit expectation, and the inter-bank certificate of deposit issuance interest rate and the yield of long-term bonds have rebounded simultaneously.
“At the same time, the maturity scale of inter-bank certificates of deposit is relatively large. There is obvious synchronization between the issuance of inter-bank certificates of deposit and the repayment at maturity. In March this year, 2.17 trillion yuan of inter-bank certificates of deposit expired, the highest value since July 2018, and the issuance scale of inter-bank certificates of deposit increased accordingly.” Zhou Yue said.
certificate of deposit interest rate has limited room to rise again
Is there any room for increase in the issuance volume and interest rate of certificates of deposit? Market participants said that the monetary policy will continue to exert force, the upward space of interbank certificate of deposit interest rate may be limited, and there is still room for RRR reduction.
As of March 25, the interest margin between the issuing interest rate of one-year large state-owned inter-bank certificates of deposit (2.62%) and the one-year MLF interest rate (2.85%) was 23bp; In February, the difference between the issuing interest rate of one-year large state-owned inter-bank certificates of deposit (2.42%) and the one-year MLF interest rate was 43bp Compared with the same period last month, the interest margin narrowed by 20bp in March.
Zhou Yue said that from the interest rate difference between the certificate of deposit interest rate and MLF interest rate, the upward space of the certificate of deposit interest rate is relatively limited.
“Considering the steady growth target of 5.5% for the whole year, the downward movement of the policy interest rate center will help to curb the upward trend of interbank certificate of deposit interest rate.” Zhou Yue said.
Mingming believes that the cost of the bank’s liability side is rising, and the demand for long-term funds is more obvious. Although the upward space of interbank certificate of deposit interest rate is limited, there is still room for the subsequent reduction of reserve requirements.
Yang yewei, chief fixed income analyst at Guosheng securities, said that there is still the possibility of RRR reduction in the future. On the one hand, the economy is still relatively weak and needs flexible and abundant monetary policy support; On the other hand, wide credit will generate capital demand, and the central bank’s RRR reduction can provide financial support for wide credit. At present, the RRR reduction window has not been closed.
“At present, the economic recovery situation is still not solid, especially under the influence of the epidemic disturbance and the conflict between Russia and Ukraine, it is necessary to further benefit the entity, so it is necessary to release space through the reduction of reserve requirements.” Say it clearly.
