On July 11, the People's Bank of China (hereinafter referred to as the "central bank") released data showing that in June, RMB loans increased by 2.81 trillion yuan, an increase of 686.7 billion yuan year-on-year; the increase in social financing scale was 5.17 trillion yuan, compared with the previous year. 1.47 trillion yuan more in the same period last year.
In the first half of this year, the loan market quoted rate (LPR) has been cut to the lowest point since the reform.The latest downgrade occurred in May. At that time, the 1-year LPR remained at 3.7%, and the 5-year LPR was cut by 15 basis points to 4.45%. This was the largest reduction in the 5-year LPR since the LPR reform. , far exceeding market expectations.According to data released by the central bank, the corporate loan interest rate from January to April this year was 4.39%, a year-on-year decrease of 0.25 percentage points and remained at the lowest level since statistical records began.
The "China Regional Financial Operation Report (2022)" released by the central bank on July 8 stated that the continuous deepening of LPR reform has achieved good results, the transmission channel of "market interest rate + central bank guidance → LPR → loan interest rate" has been continuously strengthened, and the transmission efficiency of monetary policy has been strengthened. With further improvement, the actual loan interest rate remained stable with some decline, and remained at a low level.
With the gradual recovery of credit demand and the continued low level of real loan interest rates, is there still a possibility of a reduction in the LPR in July?
Wang Qing, chief macro analyst of Orient Jincheng, said in an interview with a reporter from Securities Daily that the domestic economy has entered a period of recovery at this stage, and it is expected that the medium-term lending facility (MLF) interest rate and deposit reserve ratio will remain stable in July. The probability of downgrade is small.This means that it is unlikely that the LPR will be lowered in July, whether from a pricing basis or from a spread factor.
Since May, the policy of stabilizing the economy has continued to exert force, and the financing demand of the real economy has gradually recovered."The current financing environment remains loose as a whole, and corporate financing is guaranteed. In recent years, corporate loan interest rates have continued to decline as a whole, and financing costs have continued to decline." Liang Si, a researcher at the Bank of China Research Institute, said in an interview with a "Securities Daily" reporter. If the effect continues to appear, it is expected that the LPR will continue to remain unchanged in July.
However, if looking at the long-term perspective, many interviewed experts told reporters that there is still some room for downward adjustment of LPR in the second half of the year, especially for varieties with a period of more than 5 years.
Liang Si believes that there is still a lot of room for my country's interest rate policy at present, and whether it will be lowered will be affected by factors such as the degree of economic recovery in the second half of the year and changes in corporate financing costs.If there is a need for more supportive policies to promote economic recovery, the LPR may be moderately lowered to further reduce the financing cost of the real economy.
According to Liu Feng, chief economist of Galaxy Securities, there is a possibility of further lowering the LPR in the second half of the year, but the magnitude will not be too large.
"In the second half of the year, there is still some room for lowering LPR quotations with a maturity of more than 5 years." Wang Qing said that the LPR reform and the newly established market-based adjustment mechanism for deposit interest rates in April provided the regulator with corresponding policy tools.In the second half of the year, while the MLF interest rate remains unchanged, the regulators can further tap the potential of the market-based adjustment mechanism for deposit interest rates to guide the effective decline of bank deposit costs, drive down LPR quotations, and then reduce corporate and household loan interest rates. This will be the next step. A specific measure to "take into account internal and external balance" for half a year.
