Since the beginning of this year, the people's Bank of China (hereinafter referred to as the "central bank") has continued to release the dividend of the reform of the quoted interest rate (LPR) in the loan market, optimized the supervision of deposit interest rate, and further reduced the actual loan interest rate. According to China's monetary policy implementation report for the first quarter of 2022 released by the central bank on May 9, the weighted average interest rate of loans was 4.65% in March, down 0.45 percentage points year-on-year. Among them, the weighted average interest rate of general loans was 4.98%, a year-on-year decrease of 0.32 percentage points; The weighted average interest rate of corporate loans was 4.36%, down 0.27 percentage points year-on-year. On the whole, the comprehensive financing cost of enterprises decreased steadily in the first quarter, and the operating cost of entity enterprises further decreased. At the same time, the central bank said that it would "promote the reduction of comprehensive financing costs of enterprises" in the next stage. Mingming, chief economist of CITIC Securities, said in an interview with Securities Daily that the central bank continued to emphasize the goal of reducing comprehensive financing costs of enterprises, indicating that the demands for stable growth and wide credit have been strengthened. However, unlike the way of cost reduction in China's monetary policy implementation report in the fourth quarter of last year, which focused on "giving play to the efficiency of quotation interest rate reform in the loan market", China's monetary policy implementation report in the first quarter of this year focused on "giving play to the important role of the market-oriented adjustment mechanism of deposit interest rate". In April, the central bank guided the interest rate self-discipline mechanism and established a market-oriented adjustment mechanism for deposit interest rates. The member banks of the self regulatory mechanism shall reasonably adjust the deposit interest rate with reference to the bond market interest rate represented by the yield of 10-year Treasury bonds and the loan market interest rate represented by 1-year LPR. After the establishment of the new mechanism, the bank's deposit interest rate has a higher degree of marketization. Under the background of the overall decline of the current market interest rate, it is conducive to the bank to stabilize the debt cost and promote the further decline of the real loan interest rate. The fixed income team of Societe Generale Securities believes that from the perspective of the pricing mechanism of LPR, LPR is formed by adding points on the basis of MLF operating interest rate, and the increase range mainly depends on the capital cost of each quotation bank, market supply and demand, risk premium and other factors. The deposit interest rate affects the capital cost of the bank, and then affects the increase range. After the establishment of the market-oriented adjustment mechanism of deposit interest rate, there may be asymmetry in the reduction of LPR and MLF, and the bank may reduce the deposit interest rate at the same time. According to the report on the implementation of China's monetary policy in the first quarter of 2022, state-owned banks such as the postal savings bank of the establishment of diplomatic relations between industry and agriculture and most joint-stock banks have reduced their time deposits with a term of more than one year and the simple interest rate of large deposits in late April, and some local legal person institutions have also reduced accordingly. According to the latest survey data, in the last week of April (April 25-may 1), the weighted average interest rate of new deposits in financial institutions across the country was 2.37%, down 10 basis points from the previous week. Zhang Yu, assistant director and chief Macro Analyst of Huachuang Securities Research Institute, told the Securities Daily that recently, whether the national Standing Committee encourages large banks with high provision level to orderly reduce the provision rate, or the RRR reduction policy, as well as the current decline in the weighted average interest rate of deposits, will help to reduce the debt cost of commercial banks, and then promote the LPR reduction. Since this year, LPR has only experienced a downward adjustment in January. LPR over one-year and five-year periods have decreased by 10 basis points and 5 basis points to 3.7% and 4.6% respectively, and then remained unchanged. The 20th of this month will usher in a new phase of LPR. Is there any possibility of downward adjustment? "In the last week of April, the weighted average interest rate of new deposits in financial institutions across the country was 2.37%, down 10 basis points from the previous week, superimposed with the overall RRR reduction of 0.25 percentage points in April, which is expected to promote the reduction of LPR quotation in May, so as to release the potential of LPR reform, effectively reduce the comprehensive financing cost of the real economy and increase the effective credit demand." Wen bin, chief researcher of Minsheng Bank, said. Mingming also believes that after the establishment of the market-oriented adjustment mechanism of deposit interest rate, it will guide the decline of bank debt cost, which is expected to drive the decline of LPR. The RRR reduction in April did not lead to the decline of LPR quotation. Superimposed on the effectiveness of market-oriented reform of deposit interest rate, it is expected that LPR may decline by 5 basis points in May. (Xinhua News Agency)