With the foreshadowing of a 10 basis point reduction in the MLF (Medium Term Lending Facility) operating interest rate on June 15th, the new LPR (Loan Market Quotation Rate) reduction on June 20th is a high probability event. Several experts interviewed by Securities Daily believe that the LPR reduction can effectively reduce financing costs and is expected to promote the transfer of residents' savings to the consumption and investment sectors. According to the latest economic data released recently, in May, the year-on-year growth rate of the main indicators of production demand decreased, mainly due to the increase in the base during the same period last year. Excluding the base factor, the overall economic operation was stable. However, issues such as insufficient demand and weak endogenous motivation continue. Feng Lin, a senior analyst at Dongfang Jincheng, told Securities Daily that from macro data, the growth rate of residents' income has rebounded relatively slowly. In the first quarter, the actual year-on-year growth rate of per capita disposable income of residents was only 3.8%, which is lower than the GDP growth level of that quarter. The current consumer psychology of residents is still relatively cautious, which is directly reflected in indicators such as a significant increase of 9.2 trillion yuan in household deposits from January to May, a year-on-year increase of 1.4 trillion yuan. The survey report on urban depositors in the first quarter of 2023 released by the central bank in April 2023 showed that 58.0% of residents tended to "save more" in the first quarter, although it decreased by 3.8 percentage points compared to the previous quarter, it is still at a relatively high level. The lower LPR will help residents transform their savings into investment and consumption, especially stimulating them to increase their consumption of commodities such as cars and housing, "Wu Chaoming, Vice President of the Financial Information Research Institute, told Securities Daily. Zhou Maohua, a macro researcher at the Financial Market Department of Everbright Bank, told Securities Daily that the reduction in LPR for loans with a maturity of more than 5 years, which serves as the anchor for mortgage rates, can help reduce home purchase costs. Mr. Wang, who works in Beijing, told reporters that he has been on the sidelines since he had plans to buy a house at the beginning of this year. Recently, the prices of second-hand houses in Beijing have declined, and if combined with a lower LPR, it would be a good time to buy a house. From the stock market perspective, the sentiment in the A-share market significantly rebounded last week. According to the analysis of Industrial Securities Research Report, currently, with the emergence of various positive factors, the market has entered a repair window driven by a rebound in risk appetite. One of the factors is that the central bank lowered the reverse repurchase rate by 10 basis points, and on June 15th, the MLF was lowered as scheduled. Various marginal easing policy measures began to become a reality from expectations, continuously stabilizing market confidence. But Wu Chaoming reminds that even if the LPR is lowered this month, it is not advisable to overestimate the stimulating effect of "interest rate cuts" on consumption and investment. Insufficient demand is still a prominent issue facing the current economic operation, and a LPR reduction has a limited effect on boosting demand. He said: "The reasons for the current lack of demand are complex and comprehensive, such as expectations need to be boosted, confidence needs to be improved, and further package measures need to be taken." As for what policy measures are expected, CITIC Securities Research News believes that the reserve ratio may be reduced in the third quarter; In addition, the expansion and renewal of structural monetary policy tools may be the next direction; In terms of fiscal policy, efforts may be made to reduce taxes and fees. (New News Agency)
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：Securities Daily
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