Reporter Tan Zhijuan reports from Beijing
The latest loan market quotation rate (LPR) remains unchanged: On April 22, the People's Bank of China authorized the National Interbank Lending Center to announce that the one-year LPR was 3.45% and the five-year LPR was 3.95%, both unchanged from the previous month.
In this regard, Zhou Maohua, a researcher at the macro market department of Everbright Bank, told the reporter of China Business News: "The LPR quotation remained unchanged in April, which was basically in line with market expectations. Due to the pressure on the net interest margin of some banks and the stable MLF interest rate in April, the market has expected the LPR interest rate to remain unchanged this month. ”
Yu Fenghui, an economist and new finance expert, recently told the China Business Daily: "While using the LPR as a key tool for interest rate market-oriented reform, the central bank may combine other policy tools such as deposit reserve ratio adjustment and targeted support measures to achieve monetary policy goals in a more comprehensive way." When the LPR is temporarily immobilized, other policy tools may become the focus of guiding market interest rates and optimizing the credit structure. ”
LPR quotations remained unchanged
Wen Bin, chief economist of Minsheng Bank, believes that the LPR quotation in April was flat in the early stage, mainly due to four aspects:
First, the MLF interest rate remained unchanged in April, and the pricing basis of LPR quotations remained unchanged.
It is understood that the LPR quotation = MLF interest rate + plus points, and the MLF interest rate is used as the anchor interest rate of the LPR quotation, and its change will have a direct and effective impact on the LPR.
On April 15, the central bank carried out a 1-year MLF operation of 100 billion yuan, and the winning interest rate remained unchanged at 2.5%. Due to the continuation of MLF in April, the probability of LPR quotation reduction this month has been greatly reduced.
Second, since the beginning of this year, the loan interest rate has continued to fall sharply, the net interest margin of banks has continued to be under pressure, and there is no room for LPR quotations to be lowered again in the short term.
In February, the People's Bank of China (PBOC) cut the reserve requirement ratio by 0.5 percentage points and guided the LPR of more than 5 years to be sharply reduced by 25BP, driving the loan interest rate further downward.
According to data from the central bank, in March 2024, the weighted average interest rate of new corporate loans was 3.75%, 1BP lower than the previous month, 22BP lower than the same period last year, at a historical low, and the interest rate on new personal housing loans fell to 3.71%, 15BP lower than the previous month and 46BP lower than the same period last year.
According to the statistics of the Shell Research Institute, in March 2024, the average interest rate of the first mainstream mortgage in Baicheng was 3.59%, and the average interest rate of the second mainstream mortgage was 4.16%, both unchanged from the previous month. In March, the interest rates of the first and second sets of mainstream mortgages fell by 43BP and 75BP respectively compared with the same period in 2023. Since April, 18 cities have announced the cancellation of the lower limit of commercial personal housing loan interest rates for the first house, and the downward space for retail loan interest rates has been further opened.
"As loan interest rates continue to decline, the pressure on net interest margins in the first quarter continues, and low interest rates and low interest margins will become the norm. Against this backdrop, the room for banks to further reduce the LPR is also shrinking significantly. Wen Bin thinks.
Third, the competition for deposits has intensified since the beginning of the year, which is not conducive to the cost control of core deposits as a whole, and the reduction of LPR points has been further restricted.
Fourth, the current part of the credit interest rate has been low, and the LPR quotation remains unchanged, which is also aimed at preventing rotation and improving efficiency.
There may be room for downward adjustment in the future
Looking ahead, the interviewed experts believe that there is still room for downward adjustment of LPR quotations in the later period.
Lin Xianping, secretary general of the Cultural and Creative Research Institute of Zhejiang University City College, told China Business News on April 22: "Judging from the current situation, there may be some room for LPR quotations to be lowered in the future. Although the current LPR quotation remains stable, the central bank is likely to continue to implement a more accommodative monetary policy to stimulate economic growth. Therefore, LPR quotations are expected to continue to be lowered in the coming period to promote the reduction of financing costs for the real economy, which in turn will promote economic growth. ”
However, Lin Xianping also said: "The reduction of LPR quotations also needs to take into account factors such as market risks and the tolerance of financial institutions, so the specific magnitude and frequency of adjustments need to be further observed and analyzed." ”
Bai Wenxi, vice chairman of the China Enterprise Capital Alliance, also told the reporter of China Business News: "Whether there is still room for downward adjustment of LPR quotations in the future needs to consider a variety of factors, including market interest rate level, monetary policy, economic situation, etc. As things stand, the possibility of a downward revision remains, but the exact magnitude of the adjustment remains to be seen in the market's reaction and policymakers' decisions. ”
Some industry experts also believe: "Affected by the low price level, the current real economy real financing cost is high, focusing on boosting macroeconomic aggregate demand, the future LPR quotation may still follow up the MLF interest rate reduction." ”
However, some experts believe that there is no motivation for further downward adjustment of the LPR in the short term.
Wen Bin believes that the second quarter may enter the policy observation period, and there is a lack of motivation for further downward adjustment of the LPR in the short term.
On March 21, Xuan Changneng, deputy governor of the People's Bank of China, said at a press conference held by the State Council New Office: "The mainland's monetary policy has sufficient policy space and rich tool reserves, the statutory reserve ratio still has room to fall, and the decline in deposit costs and the shift in monetary policy of major economies are conducive to broadening the autonomy of interest rate policy operations." ”
In this regard, Wen Bin said that this shows that under the consideration of "taking into account the internal and external equilibrium in price", the policy interest rate cut may need to meet several conditions: first, the Fed's interest rate cut path is clear, and the pressure of RMB depreciation has eased; second, the deposit cost of commercial banks has declined; third, the economic recovery and price recovery are still not optimistic, and countercyclical policies are urgently needed.
"Recently, the probability of the Federal Reserve cutting interest rates has continued to decline, the pressure on the interest rate spread of domestic commercial banks is still large, and the central bank's demand for air defense still exists. With the economy showing some signs of stabilization and recovery, and the dual constraints of domestic and foreign interest rate differentials and deposit and loan interest rate differentials, lowering the policy rate should not be an option in the short term. Wen Bin said.
Therefore, Wen Bin believes that before the policy rate is lowered, the RRR is lowered or the deposit rate is lowered, the LPR is likely to remain stable, so as to "take into account the health of the balance sheet of the banking industry".
Zhou Maohua also told reporters: "Judging from the data, the economy got off to a good start in the first quarter, the financing of the real economy maintained a high level, and since the beginning of the year, the macro policy has been moving forward, and the central bank still has a lot of room for release in policies such as RRR cuts, interest rate cuts, and LPR cuts by 25BP, and the urgency and willingness of short-term banks to further reduce LPR quotation rates are not high." ”
(Editor: Meng Qingwei Review: Hao Cheng Proofreader: Yan Jingning)