Why did the LPR of the two periods remain unchanged this month? Excluding the scale of MLF funds recovered by the central bank, this RRR reduction released nearly 200 billion yuan of long-term funds less than the previous two rounds. If the central bank has handed over 600 billion yuan of balance profits to the central finance, there are not many medium - and long-term funds released by the central bank recently. However, compared with the impact of the RRR reduction on the capital cost of banks, the RRR reduction only helps to reduce the capital cost of financial institutions by about 6.5 billion yuan per year, and 18 quotation banks are not included in the scope of banks involved in the targeted RRR reduction. Considering the multiplier efficiency of currency, this RRR reduction only reduces the capital cost of the quotation bank by about 1.5bp, which is less than the step of 5bp. Therefore, the limited LPR in the two periods of this month has not been reduced.
How to release the potential of LPR reform may be the focus of the central bank in the next step. Since the reserve requirement reduction in December 2021 and the interest rate reduction in January 2022 have an asymmetric impact on LPR, the point difference between the previous one-year and five-year LPR has expanded by 10bp to 0.9% after the interest rate reduction in January. Since this year, the 23 measures launched by the central bank have failed to promote the decline of LPR this month, which is slightly lower than expected. Given the limited space for reducing reserve requirements and interest rates, how to promote the decline of LPR may be the focus of the central bank in the next step.
In the next step, the central bank will continue to maintain reasonable and sufficient liquidity, promote the further decline of LPR by reducing the cost of bank funds, and make good use of structural monetary tools to accurately force key areas and weak links.
The possibility of future interest rate cuts is low. The central bank also clarified its concerns about inflation and the adjustment of monetary policy in major developed economies in the question and answer session of reporters. In the face of a more hawkish Federal Reserve, more obvious differences in economic growth and epidemic prevention policies, it is expected that monetary policy concerns about China US interest rate spread and direct investment will further rise. Therefore, we believe that the possibility of reducing MLF interest rate in the future will be further reduced. It is expected that incremental continuation of MLF and Omo to maintain reasonable and abundant liquidity will be the main driving force of open market operation.
Adjusting the relevant policies of deposit benchmark interest rate or the main means for the force of monetary policy in the future. According to the statement in the press conference of financial statistics in the first quarter of 2022, in terms of price, the central bank has a clear idea of promoting the reduction of enterprise financing costs by giving full play to the efficiency of LPR reform. However, at present, there is limited room for interest rate reduction. A detailed list of China's monetary policy tools, including deposit benchmark interest rate and CBS, is helpful to reduce the capital cost of banks. After the reform of the self regulatory upper limit of deposit interest rate, it is expected that the reduction of the increase in the benchmark deposit interest rate will have a great impact on reducing the bank's capital cost, especially the medium and long-term capital cost, and will contribute to the reduction of LPR quotation.
All kinds of refinancing have made precise efforts, and it is expected that scientific and technological innovation refinancing will help stimulate manufacturing investment. At present, there are many areas involved in various types of refinancing by the central bank. First of all, inclusive refinancing includes agricultural refinancing involving "agriculture, rural areas and farmers" and small refinancing serving small and micro enterprises. In the first quarter, the two types of loans increased by 475.9 billion yuan year-on-year. At the same time, the 400 billion yuan inclusive credit loan support plan for small and micro enterprises has also been included in the management of re loans for supporting agriculture and small enterprises, and will continue to be issued on a rolling basis. Secondly, in key areas, carbon emission reduction support tools and special refinancing to support clean and efficient utilization of coal were launched in November 2021. Since April, the central bank has also launched special refinancing for inclusive elderly care, special refinancing for scientific and technological innovation and refinancing in the field of transportation and logistics, totaling 340 billion yuan. Among them, the special re loan for scientific and technological innovation is mainly used to support scientific and technological enterprises such as "high-tech enterprises", "specialized special and new small and medium-sized enterprises", national technological innovation demonstration enterprises and one-way champion enterprises in the manufacturing industry, which is expected to provide good support for medium and long-term loans in the manufacturing industry.
Risk warning: the epidemic spread exceeded expectations, and China's foreign policies exceeded expectations
