Zhao Wei, chief economist of Guojin Securities, said on the 20th that the 1-year LPR was lowered by 10BP and the 5-year LPR was lowered by 5BP, which basically met market expectations.
The recent reduction of the MLF interest rate, and the signal revealed by the central bank's press conference has been very clear, the financial sector should take the initiative to act and make the front; under the current LPR anchored MLF interest rate framework, after the MLF interest rate is cut by 10BP, the 1-year LPR and other downward adjustments are also within the market expectations, and the 5-year LPR reduction is basically in line with our previous judgment.
The downward revision of the MLF and LPR may not be the end of a new round of monetary easing. Experience shows that the monetary easing cycle has more economic pressure stages, generally will be multiple times to cut interest rates; a new round of easing cycles starting in the second half of 2021, the RRR cuts and interest rate cuts have landed, but under the contraction of demand, the currency may still be further relaxed, and the pace and strength of subsequent easing may depend on the landing of the stable growth effect.
While liquidity is loose, the central bank may continue to use refinancing, direct tools, etc., to guide financial institutions to increase key support for small and micro enterprises, scientific and technological innovation, green development and other fields.
!["Full start next week!" Zhao Wei left Kaiyuan Securities and became the chief economist of Guojin Securities[fig]](data:image/gif;base64,R0lGODlhAQABAIAAAP///wAAACwAAAAAAQABAAACAkQBADs=)