The LPR interest rate is now adjusted asymmetrically. On the 20th, the people’s Bank of China authorized the national interbank lending center to announce the latest phase (may) LPR, with a one-year LPR of 3.7%, unchanged from the previous month; LPR over 5 years was 4.45%, down 15 basis points from the previous month.
From the first quotation of LPR in August 2019 to April 2022, the one-year LPR has been reduced by 55 basis points, the five-year LPR has been reduced by 25 basis points, and the one-year LPR has been reduced by 30 basis points more than the five-year LPR. During the period, there were 6 LPR quotation adjustments, of which 5 had a greater decline in one-year period than in five-year period, and only 1 had a flat decline. This also means that the LPR quotation in May was reduced separately for the first time in a five-year period.
“The market-oriented adjustment mechanism of deposit interest rate promotes the decline of the cost of medium and long-term liabilities of banks, and promotes the phenomenon that the one-year period does not fall for the first time since the reform, while the five-year period decreases by 15 basis points at one stroke and crosses three steps at a time, which is far more than the market expectation.” Tao Chuan, Soochow Securities Co.Ltd(601555) chief Macro Analyst, said on the 20th that the 15 basis points reduction in the five-year LPR this month is a concentrated reflection of the previous measures such as the central bank’s RRR reduction and the adjustment of the market-oriented mechanism of deposit interest rate. At the same time, after the new RMB loans of residents turned negative again in April and the average price of new commercial houses in 70 large and medium-sized cities decreased by 0.1% year-on-year, the reduction of LPR and the reduction of the lower limit of the first mortgage interest rate announced by the central bank reflect the determination of the central bank to stabilize effective demand. At the same time, under the overall policy of “housing without speculation”, it is determined to support rigid and improved housing demand and stabilize the real estate market.
\u3000\u3000 “The market-oriented adjustment mechanism of deposit interest rate implemented by the central bank earlier, that is, banks adjust the deposit interest rate with reference to the yield of 10-year Treasury bonds and 1-year LPR, which has a significant effect on reducing the capital cost of banks. Generally speaking, the two standard cuts and one interest rate cut since December 2021 are superimposed. After the recent deposit interest rate reform, the weighted average interest rate of new deposits in banks is reduced by 10 basis points to 2.37%. The superposition of multiple policies can promote the medium and long-term capital of banks Costs fell by nearly 15 basis points. ” Tao Chuan further pointed out.
The central bank started the benchmark conversion of stock floating rate loan pricing on March 1, 2020. At present, more than 95% of individual housing loan interest rates are linked to 5-year LPR. The reduction of the five-year LPR interest rate can reduce the personal housing loan interest rate to 4.25% for the first house and 5.05% for the second house. Based on the repayment of 500000 loans and 30-year equal principal and interest, the reduction of LPR can reduce the monthly payment of residents’ housing loans by 45 yuan. With the reduction of the lower limit of housing loan interest rate, the monthly housing loan expenditure of residents’ families can be reduced by 100 yuan.
