Events
On January 20, 2022, the quoted interest rate (LPR) of the loan market is: 1-year LPR is 3.7% (expected 3.7%, previous value 3.8%), and more than 5-year LPR is 4.6% (expected 4.55%, previous value 4.65%).
Comments
\u3000\u30001. LPR formation mechanism
The loan market quotation interest rate (LPR) is quoted by each quotation bank according to the open market operation interest rate (mainly refers to the medium-term lending convenience interest rate), which is calculated by the national interbank lending center to provide pricing reference for bank loans.
At the 2021 Financial Statistics Press Conference held by the state information office on January 18, Liu Guoqiang, vice president of the people's Bank of China, also explained the influencing factors of LPR quotation. LPR is formed by the quotation bank according to the market-oriented quotation of the actual loan interest rate for the best customers, and capital cost, market supply and demand, risk premium and other factors will affect LPR quotation, There are also open market operating interest rates, medium-term lending convenience interest rates, and deposit interest rate supervision, which will also have an impact on the cost of funds.
On January 17, the central bank promoted the 1-year medium-term lending facility (MLF) and the 7-day open market reverse repo operation, and the interest rate decreased by 10bp. The LPR interest rate cut this time is basically in line with expectations.
\u3000\u30002. Reasons for previous LPR reduction
Since the LPR reform in August 2019, we have calculated that there have been 6 adjustments in LPR, including
3 stages:
(1) at the beginning of LPR reform, the loan interest rate was guided to decline. On September 20, 2019, the one-year LPR was reduced from 4.25% to 4.20% (down 5bp). On November 20, 2019, the one-year LPR was reduced from 4.20% to 4.15% (down 5bp); The 5-year LPR decreased from 4.85% to 4.80% (down 5bp).
(2) in order to repair the negative impact of the epidemic on the economy, on February 20, 2020, the one-year LPR was reduced from 4.15% to 4.05% (down 10bp); The 5-year LPR decreased from 4.80% to 4.75% (down 5bp). On April 20, 2020, the one-year LPR was reduced from 4.05% to 3.85% (20bp); The 5-year LPR decreased from 4.75% to 4.65% (down 10bp).
(3) China's economic development faces triple pressures of demand contraction, supply shock and weakening expectation. On December 20, 2021, the one-year LPR was reduced from 3.85% to 3.80% (down 5bp). On January 20, 2022, the one-year LPR was reduced from 3.80% to 3.70% (10 BP reduction); The 5-year LPR decreased from 4.65% to 4.60% (down 5bp)
\u3000\u30003. The effect of this down regulation of LPR
(1) under the background of steady economic growth, the comprehensive transmission of the chain of "omo-mlf-lpr-loan interest rate" is conducive to stimulating credit supply to the greatest extent and stimulating the increase of enterprise loan demand.
(2) the five-year LPR is reduced by 5bp, which is slightly lower than our expectation. On the one hand, we believe that this reflects the state's determination to "live without speculation", on the other hand, it can also reduce the purchase cost of buyers or drive the recovery of real estate sales.
Risk tips
Epidemic development exceeded expectations, economy and policy exceeded expectations, overseas uncertainty risk, etc.
