Editor丨Zhongding Holding Group.
Precise policies to improve the efficiency of monetary policy.
On December 28, the official website of the People's Bank of China announced that the regular meeting of the Monetary Policy Committee of the People's Bank of China for the fourth quarter of 2023 (the 103rd in total) was held in Beijing on December 27.
The regular meeting of the Monetary Policy Committee of the Central Bank has always received extensive attention from the market. This regular meeting is about:Monetary policy, real estate, RMB exchange rateand other aspects of the adjustment of expressions, releasing many policy signals to the market.
Quick Facts:
We should accurately and effectively implement a prudent monetary policy, pay more attention to counter-cyclical and cross-cyclical adjustments, and give better play to the dual functions of monetary policy tools, both aggregate and structural.
Maintain reasonable and sufficient liquidity, and guide the reasonable growth and balanced allocation of credit.
Promote the recovery of low prices and keep prices at a reasonable level.
Prevent the formation of unilateral consensus expectations and self-reinforce, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.
Do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance
According to the city's policies, we will accurately implement differentiated housing credit policies to better support the demand for rigid and improved housing, and meet the reasonable financing needs of real estate enterprises with different ownership systems without discrimination.
We will further strengthen inter-departmental policy coordination and cooperation, strengthen policy coordination, and give full play to the effectiveness of monetary and credit policies.
Interpretation of important signals
In response to the press release of the regular meeting of the central bank in the fourth quarter, industry investment researchers analyzed and pointed out that the signal significance of the meeting is:
1) The domestic economy continues to repair, and the policy strengthens to boost confidenceThis meeting continued the research and judgment of the current trend of the domestic economy rebounding, used "momentum enhancement" to describe the endogenous driving force of the economy for two consecutive quarters, and added the expression of "solid progress in high-quality development", but also pointed out problems such as "insufficient effective demand and weak social expectations". Based on this, the meeting adjusted the policy tone of "continuing to exert efforts and taking advantage of the momentum" to "seeking progress while maintaining stability and promoting stability through progress", and continued to emphasize the intensification of macroeconomic policy regulation and control, so as to achieve the goal of expanding domestic demand, boosting confidence, improving expectations and promoting a virtuous cycle of the economy.
2) Precise implementation of monetary policy to improve efficiencyThe discussion of monetary policy in the draft of this meeting emphasizes "seeking progress while maintaining stability and promoting stability through progress", "paying more attention to counter-cyclical and cross-cyclical adjustment", and further proposes "reasonable growth and balanced supply of credit" and keeping the scale of social finance and money supply in line with the expected target of the highest level. Combined with the additional issuance of trillion-level treasury bonds since the fourth quarter, the re-reduction of deposit interest rates and the weak inflation data, the follow-up monetary policy may cooperate with fiscal policy to enhance the multiplier effect and boost the overall financing demand of the society, so as to achieve a reasonable growth of credit, a balanced rhythm of credit delivery, and a moderate increase in the level of credit. In addition, the draft of this meeting also added the expression of "revitalizing the financial resources occupied by inefficiency" and "improving the ability of economic and financial risk prevention and control under the conditions of opening up", indicating that the follow-up monetary policy may be carried out in the form of equal emphasis on total volume and structure to prevent capital idling, so as to achieve the goal of "improving the efficiency of capital use" and effectively prevent and resolve financial risks. On the whole, the discussion of the follow-up monetary policy at this meeting is in line with the tone of "monetary policy should be precise and effective" put forward by the ** Economic Work Conference.
3) Stabilizing the exchange rate is important to stabilize expectationsCompared with the regular meeting in the third quarter, the meeting has added a new statement on preventing unilateral expectations of the exchange rate, showing that the central bank has increased its attention to exchange rate expectations, and this attention is not only reflected in the key points of the exchange rate, but also may be reflected in the consistency of the exchange rate expectations.
4) Pay attention to the financing needs of real estate enterprisesThe draft of this meeting deleted the statements on real estate policies such as the reduction of mortgage interest rates and down payment ratios in the third quarter meeting, and emphasized that to meet the financing needs of real estate enterprises.
Interest rate cuts and RRR cuts are expected to land
At present, the market is generally concerned about whether to continue to cut interest rates in the next step, that is, to cut the MLF operation rate.
After this meeting, industry insiders believe that this mainly depends on the macroeconomic trend at the end of this year and early next year, and this possibility cannot be completely ruled out. The meeting stressed that it is necessary to continue to "give full play to the guiding role of the central bank's policy interest rate, release the efficiency of the loan market interest rate reform and the market-oriented adjustment mechanism of deposit interest rates, and promote the steady decline of corporate financing and household credit costs".
Considering that domestic prices will continue to be at a low level in 2024, coupled with the fact that the central banks of the United States and Europe will also switch to the process of cutting interest rates, the constraints of exchange rate factors on the flexible adjustment of domestic monetary policy will be further weakened, which provides more favorable conditions for further reduction of policy interest rates. In addition, from the perspective of supporting commercial banks to fully participate in the debt restructuring of urban investment platforms and maintaining a reasonable growth in credit delivery, there is also a possibility of RRR reduction in the first quarter of 2024.
Therefore, with a view to enhancing the momentum of the economic rebound, the interest rate cut and RRR cut in the first quarter of 2024 are likely to land. In addition, the official manufacturing PMI index is expected to remain below 50% in December 2023, which means that the indicator will run in contraction territory for three consecutive months. Looking back at history, you can see,Once the official manufacturing PMI index falls below the boom-bust balance line for three consecutive months, the probability of monetary policy responding will increase significantly.