This article is Han Zijun's 80th long article in 2023.
Today, I will make up for the previous shortcomings and update the interpretation of China's monetary policy implementation report in Q3 2023. In November, the PBOC released the Monetary Policy Implementation Report.
It is important to know that the "Monetary Policy Implementation Report" is very important, it is the department of currency issuance, the People's Bank of China (referred to as the "central bank"), from the aggregate dimension and the policymaker dimension to summarize and set the tone of the current and future monetary policy. Attentive readers can find clues about the macro economy, investment transactions and home purchase and financial management from the central bank's monetary policy implementation report. Not much to say, let's interpret it point by point.
The report shows that China's GDP increased by 4% year-on-year in the first three quarters9%, CPI increased by 11%, the balance of RMB loans reached 235 trillion yuan, and the stock of broad money (m2) and social financing increased by 10 percent year-on-year3% and 9%. From the perspective of aggregate, China's economic operation is gradually improving.
Judging from the monetary policy implementation report, there are still many tools in the central bank's monetary policy toolboxThese include, but are not limited to, open market operations, medium-term lending facilities (MLF), standing lending facilities (SLF), adjustment of the reserve requirement ratio, credit policy guidance, and structural monetary policy tools (such as re-lending to support agriculture and small enterprises, supplementary mortgage loans, and loan support plans for guaranteed delivery of buildings).
It is worth noting:In response to the severe situation in the real estate market in 2023, the central bank has specially issued three structural monetary policy tools, with a total amount of about 380 billion yuanThey are: 200 billion yuan of guaranteed delivery loan support plan, 100 billion yuan rental housing loan support plan, 80 billion yuan of special re-lending for real estate enterprises and other structural monetary policy tools.
We know that the central bank, as the bank that issues the currency, controls the general valve of the currency, so what kind of caliber does the central bank control the amount of money?Are there some rules that work?
On the fourth page of the report, the answer is given: a prudent monetary policy should be precise and powerful, and more attention should be paid to cross-cyclical and counter-cyclical adjustment, enrich the monetary policy toolbox, and strive to create a good monetary and financial environment. Accurately grasp the law and new characteristics of the supply and demand of money and credit, and strengthen the dual adjustment of the total amount and structure of money. Comprehensive use of a variety of monetary policy tools to maintain reasonable and abundant liquidityMaintain the basic match between the growth rate of monetary volume and the scale of social financing and the growth rate of the nominal economy (that is, the growth rate of GDP).
In other words, the central bank will not release water at will, but adopt a prudent monetary policy to match the amount of money and GDP growth.
So here's the question?What will happen to China's nominal economic growth rate (GDP growth rate)?It is not difficult to find out when querying public data:Since joining the WTO in 2001, China's GDP growth rate has experienced a process from 10%+ double-digit to about 6%.From the initial extensive growth mode to the high-quality growth mode focusing on structure and development, we also call the latterChina's new economic normal.
Therefore, readers who are still looking forward to the big release of water can wash and sleepAccording to the previous reasoning, the author personally believes that the growth rate of the future monetary volume is likely to remain in the range of 6%-10%.
In fact, it is a good thing for the people not to release water, because "Finance" has long said that every inflation is a looting of the wealth of the people (the "wealth effect" of inflation).
Okay, that's all for today's interpretation, if you also like Han Zijun's article, welcome to like and follow me. In addition, Han Zijun has recently faced a shortage of topics and positioning panic, and readers are also welcome to leave private messages to leave financial and financial content that they want to understand and interpret, which is effective for a long time.
References: 1. "China Monetary Policy Implementation Report - Third Quarter of 2023", People's Bank of China;
2. Other public information.