In December, the People's Bank of China (PBOC) exceeded the MLF quota for the 13th consecutive month, and the net injection hit a record high.
On December 15, the People's Bank of China carried out a one-year MLF operation of 1.45 trillion yuan to hedge the 650 billion yuan one-year MLF due today, that is, a net injection of 800 billion yuan through MLFThis is the largest "net delivery" on record.
The MLF rate for this month is 25%, unchanged from the previous month and unchanged for the fourth consecutive month. Since the beginning of this year, the MLF rate has been cut only twice, by 10bp and 15bp in June and August, for a total of 25bp in the two cuts.
The LPR rate is generally formed by the MLF rate and the bank markup, and the LPR is expected to remain unchanged this month as the MLF rate remains stable this month.
Guosheng Macro Bear Park team said last week that the decline in CPI and PPI has expanded, reflecting that the current problem of insufficient demand is still prominent, and the recent real estate sales are still significantly weak, and considering that the current DR007 is still above the policy rate, the interbank certificate of deposit interest rate has also continued to rise, and the follow-up issuance of additional treasury bonds has landedIt points to an increased likelihood of a short-term RRR cut (as soon as December). On the same day, 197 billion yuan of reverse repurchase expired, and the People's Bank of China launched a 7-day reverse repurchase operation of 50 billion yuan, and the winning interest rate was 18%, the same as before.
According to a previous report by China Securities News, Pan Gongsheng, governor of the People's Bank of China, said a few days ago that since the beginning of this year, the People's Bank of China has comprehensively used a variety of policy tools, including lowering the deposit reserve ratio, lowering the policy interest rate, and driving down market interest rates such as the loan ** interest rate (LPR). In the next stage, the People's Bank of China will continue to implement a prudent monetary policy to support the development of the real economy.
Expanding demand and preventing risks require monetary policy to provide a relatively loose liquidity environment and a suitable and stable financing interest rate. Huang Wentao, chief economist of China Securities Construction Investment, said that it is expected that the RRR and interest rate cuts will continue in 2024, and the magnitude may be similar to that in 2023, that is, the RRR will be cut by 50 basis points, the interest rate will be cut by about 20 basis points, and the deposit rate will be lowered.
Wang Tao, head of Asian economic research at UBS, believes that monetary policy will continue to exert force, maintain reasonable and abundant liquidity, and further reduce the financing cost of the real economy. "It is expected that the People's Bank of China will cut the MLF rate by another 10 basis points to 20 basis points and cut the reserve requirement ratio by 25 basis points next year, while comprehensively using other liquidity adjustment tools. Wang Tao said.
According to an earlier report by the first financial network, Sheng Songcheng, a professor of economics and finance in Europe and former director of the Central Bank's Survey and Statistics Department, said that the current weighted reserve ratio of China's financial institutions is 74%, while interest rates are already at historic lows. At present, the LPR (loan market ** interest rate) has hit a new low since the reform in 2019, which shows that the room for RRR cuts is greater than interest rate cuts. Sheng Songcheng said: "If the economic growth rate is to reach about 5% next year, we still need to work hard. "The active fiscal policy will continue next year.
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