On April 18, the State Council Information Office held a press conference. The relevant persons in charge of the central bank and the State Administration of Foreign Exchange responded to the hot issues that the market is highly concerned about.
(Photo courtesy of Hero)
Talking about the future: there is still room for monetary policy //
Zhu Hexin, deputy governor of the central bank and director of the State Administration of Foreign Exchange, said that on the whole, a series of monetary policy measures introduced in the early stage are gradually playing a role, and the national economy has continued to rebound and made a good start. There is still room for monetary policy in the future, and we will closely observe the effect of the policy, the economic recovery, and the realization of the target, and make good use of the reserve tools when the opportunity is taken.
Talking about exchange rates: resolutely guard against the risk of exchange rate overshoot //
As for the performance of the RMB exchange rate, Zhu Hexin said that in the short term, the economy has made a good start in the first quarter, marginal improvements in many areas, and an increase in positive factors will help hedge against external disturbance factors and form support for the RMB exchange rate. China's economy will enter a stage of high-quality development, the balance of payments will be balanced, the depth and breadth of the foreign exchange market will be further expanded, and the risk neutrality awareness of market players will also be significantly enhanced.
Zhu Hexin said that the People's Bank of China and the State Administration of Foreign Exchange will take China as the mainstay, take into account the internal and external balance, adhere to the system of floating exchange rate in a managed manner based on market supply and demand, and refer to a basket of currencies for adjustment. Stabilize expectations, pay close attention to changes in the foreign exchange market situation, resolutely correct pro-cyclical behavior, prevent the market from forming unilateral expectations and self-reinforcing, resolutely prevent the risk of exchange rate overshoot, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.
Foreign Investment: Cross-border Capital Flows Generally Balanced -
Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said:
Since the beginning of this year, the operation of the foreign exchange market has shown strong resilience, cross-border capital flows have been generally balanced, and market expectations and transactions have remained rational and orderly.
In the first quarter, the foreign-related income of banks on behalf of customers was US$1,658.6 billion, the external payment was US$1,655.5 billion, and the surplus of foreign-related receipts and payments was US$3.1 billion; according to the data of foreign exchange settlement and sales by banks, the foreign exchange settlement and sales of banks were US$542.2 billion, the foreign exchange sales were US$567 billion, and the deficit in foreign exchange settlement and sales was US$24.8 billion.
Recently, the scale of foreign institutional investment in domestic bonds has rebounded significantly, with a net increase of US$23 billion last year and a net increase of US$41.6 billion in the first quarter of this year.
Talking about prices: expected to rise moderately at a low level -
Zou Lan, director of the Monetary Policy Department of the People's Bank of China, said that the People's Bank of China regards maintaining price stability and promoting a moderate recovery in prices as an important consideration in grasping monetary policy, and pays close attention to the characteristics and trends of inflation indicators. On the one hand, the mainland's economy continues to improve, aggregate demand is expanding, and there are foundations and conditions for prices to rebound; on the other hand, the prices of some agricultural products have reached an inflection point in adjustment, and tourism and travel are more active. Overall, prices are expected to rise modestly from low levels, and real interest rates will change accordingly.
Talking about interest rates: preventing interest rates from being too low and leading to intensified involution competition //
Zou Lan also said that in the future, the central bank will continue to closely observe the economic rebound and economic transformation situation, not only to keep the nominal interest rate at a reasonable level and consolidate the trend of economic recovery, but also to fully consider the needs of high-quality development, avoid reducing the momentum of structural adjustment, and prevent the interest rate from being too low to lead to intensified involution competition and capital idling, which will cause further price reductions and form a bad circle with each other.
Talking about the balance of M2 exceeding 300 trillion: strengthening the monitoring of capital idling //
Talking about the balance of broad money M2 exceeding 300 trillion yuan at the end of March, Zou Lan, director of the Monetary Policy Department of the central bank, said:
This is a reflection of the continuous financial support for the development of the real economy over the past few years. On the whole, the current stock of money is indeed not low.
At present, the mainland's economic restructuring is speeding up, the economy is becoming lighter, the demand for credit has weakened compared with before, and the credit structure has been optimized and upgraded. However, all sides have a process of understanding and adapting to (this) change, and some banks still have "scale plots" in their internal assessments, which exceed the effective financing needs of the real economy; some enterprises, with the help of their own dominant position, use low-cost loan financing to buy wealth management or re-lend to other enterprises, and the main business is not profitable, but finance has become the main business, which is easy to form idling and capital precipitation, and reduce the efficiency of capital use.
Relevant departments will strengthen the monitoring of the idling of funds and improve the management assessment mechanism. In the future, with the transformation and upgrading of the economy, the recovery of effective financing demand, the improvement of social expectations, and the phenomenon of capital precipitation and idling will also be alleviated. The current huge monetary aggregate growth is likely to slow down, and there will be disturbances in the data, so it is not appropriate to make a simple year-on-year comparison.
(Wind Comprehensive China Securities Journal, Securities Times, etc.)
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