The central bank's blockbuster meeting released the latest policy signals, and steady growth will continue to increase

The central bank signaled that the steady growth policy will continue to increase.

According to the People's Bank of China's website on September 27, the regular meeting of the People's Bank of China Monetary Policy Committee in the third quarter of 2023 (the 102nd in total) was held in Beijing on the 25th, which conveyed to the market the message of positive and stable growth, stable exchange rate and promotion of property market recovery, which helped boost market confidence in economic recovery.

In terms of situation judgment, the third quarter meeting pointed out that "the domestic economy continues to recover, rebounds and strengthens momentum", which is more optimistic than the judgment of the second quarter meeting. Market analysts generally believe that although the central bank has recently cut interest rates and RRR cuts and monetary policy has made full efforts in the direction of stable growth, from the perspective of further enhancing economic growth momentum and effectively stabilizing the overall situation of employment, it is not yet the time for the policy of stable growth to slow down. Looking ahead, the central bank will continue to increase credit delivery.

Monetary policy: better play the function of aggregate and structure

At present, the market is generally concerned about whether interest rate cuts will continue in the future, that is, reduce the MLF (medium-term lending facility) operating rate.

The meeting pointed out that it is necessary to continue to exert force, take advantage of the momentum, increase the intensity of macro-policy regulation and control, accurately and effectively implement prudent monetary policy, do a good job in counter-cyclical and cross-cyclical adjustment, better play the dual functions of the total amount and structure of monetary policy tools, focus on expanding domestic demand, boost confidence, accelerate the virtuous cycle of the economy, and provide stronger support for the real economy.

Since the beginning of this year, the People's Bank of China has intensified the implementation of the introduced monetary policy, maintained reasonable and sufficient liquidity, maintained reasonable credit growth and a stable pace, and kept the growth rate of money supply and social financing scale basically matching the growth rate of the nominal economy. Enhance the guiding role of government investment and policy incentives, and effectively stimulate private investment. Promote the recovery of low prices and keep prices at a reasonable level.

The meeting also stressed that it is necessary to continue to release the effectiveness of the reform of the loan market quotation rate and the market-oriented adjustment mechanism of the deposit interest rate, and promote the steady reduction of enterprise financing and residential credit costs.

Wang Qing, chief macro analyst of Oriental Jincheng, believes that the fourth quarter is likely to continue to implement policy interest rate cuts, which mainly depends on the macroeconomic and property market trends before the end of the year, and this possibility cannot be completely ruled out. At the same time, considering that domestic prices will continue to be at a low level in the future, it also provides more favorable conditions for further reduction of the policy interest rate.

Zhou Maohua, macro researcher of the financial market department of Everbright Bank, said that since the beginning of the year, the domestic implementation of two RRR cuts, two interest rate cuts, the policy is obviously forward, this meeting mentioned structural tools, and guided financial institutions to increase urban village transformation, emergency dual-use infrastructure construction, etc., it is expected that structural support tools will be introduced in the future.

The meeting proposed to implement the increased re-loan and rediscount quota, implement the existing structural monetary policy tools, continue to increase support for key areas and weak links of the national economy such as inclusive finance, green development, scientific and technological innovation, and infrastructure construction, and support coordinated regional development with comprehensive policies. Deepen the structural reform of the financial supply side, guide the service focus of large banks to sink, promote small and medium-sized banks to focus on their main business, support banks to replenish capital, and jointly maintain the stable development of the financial market.

Real estate: Promote the reduction of the interest rate of the existing first home loan to achieve results

Promoting the real estate industry to achieve a soft landing as soon as possible has become a key point in the current macro economy. A few days ago, the interest rate adjustment of the first set of existing housing loans was officially implemented, among which the bank has taken the initiative to adjust the stock floating interest rate first home loan priced with reference to the loan market quotation rate (LPR) on the 25th, which not only reduces the communication and coordination cost of customers, but also facilitates the orderly implementation of the adjustment of the interest rate of the stock housing loan.

For the real estate market, the meeting pointed out that the city policy accurately implements differentiated housing credit policies, supports rigid and improved housing demand, implements the dynamic adjustment mechanism of the newly issued first home loan interest rate policy, reduces the down payment ratio and the lower limit of the second home loan interest rate, promotes the reduction of the existing first home loan interest rate, increases financial support for "flat and emergency" public infrastructure construction, urban village transformation, affordable housing construction and other financial support, promotes the establishment of a new model of real estate industry development, and promotes the stable and healthy development of the real estate market.

Zou Lan, director of the Monetary Policy Department of the People's Bank of China, pointed out a few days ago that it is expected that more than ninety percent of eligible borrowers can fully enjoy the policy dividends in the first time, and the interest rates of other borrowers' existing housing loans will also be adjusted by the end of October.

Wang Qing expects that after the recent intensive adjustment of real estate policies, the support of structural monetary policy tools for the real estate industry will be further increased in the future. Among them, while effectively implementing the special loan for guaranteed delivery of buildings and the guarantee of delivery of building loan support plans, it is not ruled out that the amount will be increased in the fourth quarter, and even the possibility of launching new targeted support tools will not be ruled out.

"Comprehensively considering the current operation situation of the real estate market, the capital situation of housing enterprises, and the actual level of the interest rate of newly issued residential housing loans, it is expected that under the principle of city-specific policies, all localities will accelerate the reduction of the interest rate of newly issued residential housing loans through the dynamic adjustment mechanism of the interest rate policy for newly issued first home loans, and the effective implementation of reducing the lower limit of the interest rate of second home loans, and effectively reduce the cost of buying a house." This is a key move to promote the stabilization and recovery of the property market. Wang Qing said.

Exchange rate: comprehensive policy, correction divergence

Since the beginning of this year, the global foreign exchange market has been volatile. The market is extremely concerned about the changes in the RMB exchange rate and future trends.

The policy of stabilizing the exchange rate will continue to exert force in the future. The meeting pointed out that it is necessary to deepen the market-oriented reform of the exchange rate, guide enterprises and financial institutions to adhere to the concept of "risk neutrality", comprehensively implement policies, correct deviations, stabilize expectations, resolutely correct unilateral and pro-cyclical behaviors, resolutely prevent the risk of exchange rate overshoot, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

From the perspective of market analysis, from a medium- and long-term perspective, with the gradual strengthening of the domestic economy, the RMB exchange rate is expected to maintain two-way fluctuations on the basis of basic stability.

Zhou Maohua said that recent data show that the momentum of domestic economic recovery has been enhanced, foreign trade is resilient, cross-border capital liquidity is two-way and orderly, the balance of international payments is basically balanced, and the RMB exchange rate is supported by solid fundamentals. At the same time, in recent months, the RMB has fluctuated sharply, and there is a relatively full pricing of internal and external negative factors, and the RMB has undergone many tests of severe internal and external situations, the market has accelerated its maturity and its flexibility has been significantly enhanced.