This week, the central bank cut the reserve requirement as scheduled and targeted small and micro enterprises to "broaden credit". In March, the year-on-year growth rate of us CPI reached a new high, and the conflict between Russia and Ukraine was an important factor.
On April 15 (this Friday), the people's Bank of China decided to reduce the deposit reserve ratio of financial institutions by 0.25 percentage points on April 25, 2022. For urban commercial banks without inter provincial operation and rural commercial banks with deposit reserve ratio higher than 5%, an additional 0.25 percentage point will be reduced on the basis of reducing the deposit reserve ratio by 0.25 percentage point. After this reduction, the weighted average deposit reserve ratio of financial institutions is 8.1%.
From the time point of view, considering the continuous release of RRR reduction signals by the national Standing Committee and the central bank this week, the time point of the announcement of RRR reduction is in line with market expectations, and the choice of RRR reduction on April 25 can also play a role in hedging the payment of RRR. However, the rate of this RRR reduction is slightly lower than the market expectation - only 0.25 percentage point lower. We believe that the central bank's choice is mainly based on two considerations: first, the current liquidity is at a reasonable and sufficient level. From the perspective of capital interest rate, dr007 has been below 2.00% continuously since April 2, and the overnight interest rate has also dropped to a lower level; Second, the current monetary policy needs to be more targeted to the weak links of the economy. Therefore, this time, in addition to the general reduction of the deposit reserve ratio, for urban commercial banks that do not operate across provinces and agricultural commercial banks with a deposit reserve ratio higher than 5%, an additional 0.25 percentage point will be reduced. The purpose is to increase support for small, medium-sized and micro enterprises and agriculture, rural areas and farmers. In addition, on April 15, the market interest rate pricing self-discipline mechanism held a meeting to encourage the floating upper limit of deposit interest rate of small and medium-sized banks to be reduced by about 10bp. The purpose is also to directly reduce the debt cost of small and medium-sized banks and reduce the social comprehensive financing cost through the transmission of financial institutions, which is basically consistent with the purpose of this RRR reduction.
Overseas, on Tuesday, the U.S. Department of labor released March CPI data. In March, the U.S. CPI increased by 8.5%, continuing to hit a new high since 1982, an increase of 0.6 percentage points over the previous month. Among them, the core CPI increased by 6.5%, an increase of 0.1 percentage points over the previous month (the growth rate of rent increased from 4.8% to 5.1%), but it was lower than the market expectation of 6.6%; The growth rate of energy prices rose to 32.0% from 25.6% last month, and the growth rate of food prices rose to 8.8% from 7.9%. Their year-on-year driving effects on CPI increased by 0.5 and 0.1 percentage points respectively.
In terms of month on month growth, the US CPI increased by 1.2% in March, the highest since October 2005, an increase of 0.4 percentage points over the previous month. Among them, the core CPI increased by 0.3%, down 0.2 percentage points from the previous month (the growth rate of rent price decreased slightly by 0.1 percentage point to 0.5%, and the decline of second-hand car price expanded from 0.2% to 3.8%), which was lower than the market expectation of 0.5%; Food prices increased by 1.0%, unchanged from the previous month; The growth rate of energy prices rose to 11.0% from 3.5% last month, and the pulling effect on CPI was 0.9 percentage points month on month.
Overall, the year-on-year and month on month growth rate of CPI in March increased significantly, mainly reflecting the impact of the rise in international crude oil prices after the outbreak of the conflict between Russia and Ukraine. In that month, the spot price of WTI crude oil once rose above US $110 / barrel, with a cumulative increase of 4.8%. In response to the rise in oil prices, on March 31, the Biden government announced the release of 1 million barrels of strategic oil reserves (SPR) per day in the next six months. On April 1, the IEA announced that Member States had reached an agreement on the release of oil reserves again. The easing of supply concerns prompted the decline of oil prices, which is expected to weaken the driving effect on CPI in April.
Risk tip: global inflation is rising too fast; Liquidity flows back to US debt; The global covid-19 epidemic has expanded its impact.
