The recently held executive meeting of the State Council clearly doubled the amount and proportion of inclusive small and micro loan support tools this year. Experts believe that the implementation of monetary policy is being further strengthened to give better play to the dual functions of aggregate and structure, especially the "addition" of structural monetary policy tools, stabilize enterprises and ensure employment, and focus on supporting small and micro enterprises, difficult industries and vulnerable groups affected by the epidemic. Looking forward to the future, China's monetary policy still has enough space and diversified tools, which will further strengthen camera regulation and promote the economy to return to the normal track. Structural policy instruments continue to be overweight In response to the impact of the epidemic, the monetary authorities of major economies mostly use structural monetary policy tools to inject liquidity into the financial system and real economic sectors, and China is no exception. The recently held executive meeting of the State Council proposed to double the amount and proportion of inclusive small and micro loan support tools this year. Zhou Maohua, a macro researcher of the financial market department of Everbright Bank, believes that this is an incremental support policy issued to deal with the complex economic environment, which is conducive to further increase the support for difficult enterprises, especially small and micro enterprises, stimulate the vitality of micro subjects, stabilize employment and accelerate the return of the economy to the right track. Pratt & Whitney small and micro loan support tool is converted from Pratt & Whitney small and micro enterprise loan extension support tool. The people's Bank of China has previously made it clear that from 2022 to the end of June 2023, it will provide funds according to 1% of the incremental balance of inclusive small and micro loans of local corporate banks, operate on a quarterly basis, and encourage the continuous increase of inclusive small and micro loans. Institutional people believe that the executive meeting of the State Council decided to double the amount and support proportion of the tool, which will further improve the enthusiasm of banks to lend to small and micro enterprises and promote the increase and price reduction of inclusive loans to small and micro enterprises. The active addition of structural monetary policy tools has become a distinctive feature of recent monetary policy regulation. Since the end of April, two new special refinancing tools, scientific and technological innovation and inclusive pension, have been launched one after another, increasing the amount of special refinancing to support the clean and efficient utilization of coal by 100 billion yuan. Recently, the people's Bank of China also revealed that it will increase small refinancing for agricultural support and special refinancing for civil aviation, and launch 100 billion yuan of refinancing as soon as possible to support the financing of transportation, logistics and warehousing industries. The people's Bank of China pointed out that structural monetary policy tools allow the precise drip irrigation of financial running water to the key areas and weak links of economic development, and have unique advantages in promoting the development of the real economy. Especially at the current stage, it has played an important supporting role in helping market players to bail out and the development of the real economy. Chen Yulu, vice president of the people's Bank of China, recently said that the people's Bank of China will actively make good use of structural monetary policy tools and focus on supporting the manufacturing industry, the service industry affected by the epidemic and the relief of small and micro enterprises. Provide strong support for aggregate policy tools Structural policy instruments and aggregate policy instruments are not substitutes for each other, and there is a "one of two" relationship. Experts said that if stronger policies are adopted, we should also pay attention to the effects at the aggregate level and macro level, and give better play to the dual functions of the aggregate and structure of monetary policy tools. "Although structural monetary policy tools have effectively promoted the increase, expansion and price reduction of inclusive small and micro enterprise loans, and played a positive role in the prevention and control of the epidemic, it can not be simply considered that structural policy tools can replace aggregate policy tools." Sun Binbin, chief fixed income analyst of Tianfeng securities, said that while using structural policy tools to reduce the financing cost of the real economy, we still need aggregate policy tools to play a role and reduce the cost of bank liabilities. In response to the increasingly complex and severe economic situation at home and abroad, since the beginning of this year, the people's Bank of China has stepped up the implementation of prudent monetary policy and strongly supported the stabilization of the macro-economic market. For example, the people's Bank of China lowered the reserve requirement in a forward-looking manner, maintained reasonable and sufficient liquidity in terms of total amount, and maintained sufficient support for the real economy. At the same time, we will continue to guide the decline of interest rates in the loan market and improve the transmission efficiency of monetary policy. Since the beginning of this year, the quoted market interest rate (LPR) of one-year loans and LPR over five years have decreased by 0.1 and 0.2 percentage points respectively, guiding the decline of loan interest rate and stimulating the financing demand of market subjects. In addition, the people's Bank of China promptly lowered the interest rate of small-scale refinancing for agricultural support by 0.25 percentage points. In addition, relevant persons in charge of the Ministry of finance, the State Administration of Taxation and the people's Bank of China said at the press conference on retention tax rebate on May 10 that in April, 801.5 billion yuan of tax rebate had been entered into 1.452 million taxpayer accounts. In order to ensure sufficient funds for tax credits and rebates, the people's Bank of China has turned over 800 billion yuan of balance profits since 2022, equivalent to a 0.4 percentage point reduction in reserve requirements. Incremental policy tools are expected to be launched Experts said that the regulatory authorities are also actively planning and considering the introduction of incremental policy tools as soon as possible. The people's Bank of China recently said that there are three main focus points of monetary policy in the next stage, namely, stabilizing the total amount of credit, reducing financing costs, and strengthening support for key areas and weak links. The people's Bank of China and the China Banking and Insurance Regulatory Commission recently held an analysis meeting on the monetary and credit situation of major financial institutions, emphasizing that efforts should be made from the two aspects of expanding increment and stabilizing stock to support high-quality economic development with moderate credit growth. In terms of reducing financing costs, the people's Bank of China said that it would give full play to the efficiency of the reform of quoted interest rates in the loan market, give play to the role of the market-oriented adjustment mechanism of deposit interest rates, promote the reduction of bank debt costs, and then drive the reduction of enterprise financing costs. On May 20, the new phase of LPR over 5 years decreased by 15 basis points, exceeding market expectations. "In the stage of increasing downward pressure on the economy, we should directly reduce the financing cost of the real economy, promote the expansion of new loans and social finance, and give full play to the countercyclical regulatory role of monetary policy." Wang Qing, chief Macro Analyst of Dongfang Jincheng, said. Gao Ruidong, managing director and chief macroeconomist of Everbright Securities, predicts that the people's Bank of China will continue to maintain reasonable and abundant liquidity in the follow-up, comprehensively use the total amount and structural monetary policy tools, and does not rule out further RRR reduction and expansion of refinancing and rediscount lines. (Xinhua News Agency)