Stable monetary policy, precise implementation, and solid foundation for the development of the real economy
2023-12-19
Since 2023, a prudent monetary policy has been implemented with precision and sustained efforts. The People's Bank of China (hereinafter referred to as the "Central Bank") has comprehensively utilized various monetary policy tools, played a dual role in both quantity and structure, increased countercyclical adjustment efforts, and provided stronger financial support for the real economy, consolidating the "chassis" of its development. The recently held Central Economic Work Conference emphasized that "a prudent monetary policy should be flexible, moderate, precise, and effective. Liquidity should be maintained in a reasonable and sufficient manner, and the scale of social financing and money supply should match the expected goals of economic growth and price levels.". A series of specific deployments have set the direction of monetary policy for next year. Analysts believe that in 2024, monetary policy tools will play a dual role in both quantity and structure, while enhancing efficiency. In addition, new structural monetary policy tools are also worth looking forward to. The strength of credit support for the real economy is stable. This year, China's economy is still in the process of recovery, and domestic credit demand has slowed down. The difficulty of stable and sustainable loan disbursement has increased, and the challenges of stabilizing currency and credit have increased. In this context, the central bank focuses on supporting the expansion of domestic demand, comprehensively utilizing various policy tools, guiding financial institutions to maintain a moderate and stable credit volume, and enhancing the stability and sustainability of loan growth. In March and September this year, the central bank lowered reserve requirements twice, reducing the reserve requirement ratio of financial institutions by 0.5 percentage points and releasing medium - and long-term liquidity of over 1 trillion yuan. At the same time, since the beginning of this year, the central bank has exceeded the monthly renewal of maturing MLF (Medium Term Lending Facility) and timely released liquidity to support the smooth issuance of government bonds, promoting the stable operation of market interest rates around open market operating rates, maintaining the double-digit growth rate of loans from last year's high base, effectively achieving stable growth in monetary credit and gradually improving demand in the real economy, and helping to achieve a good start to the economy in the first quarter Stable recovery momentum was maintained in the second quarter, and the growth rate in the third quarter significantly exceeded market expectations. According to the latest data released by the central bank, RMB loans increased by 21.58 trillion yuan in the first 11 months of this year. This increment has exceeded the full year of last year, indicating that the strength of credit support for the real economy remains stable. From the perspective of interest rates, the central bank continues to improve the market-oriented interest rate formation and transmission mechanism, and the reform of loan market quotation interest rates has achieved significant results. The transmission efficiency of monetary policy has increased, and the cost of social financing has significantly decreased. As of December 15th, since the beginning of this year, the LPR (Loan Market Quotation Rate) for one-year and five-year and above loans has decreased by 20 basis points and 10 basis points respectively, driving corporate loan interest rates further downward. In September, the weighted average interest rate for newly issued corporate loans was 3.82%, a year-on-year decrease of 0.18 percentage points, reaching the lowest level in history. In September, the weighted average interest rate for newly issued personal housing loans was 4.02%, a year-on-year decrease of 0.32 percentage points. As of the end of September, the interest rates of over 22 trillion yuan of existing housing loans have been lowered, with an adjusted weighted average interest rate of 4.27%, an average decrease of 73 basis points. At the same time as the quantity increases and the price decreases, the credit structure is also continuously optimized. Data shows that at the end of September, the medium and long-term loans of enterprises and institutions increased by 11.9 trillion yuan compared to the beginning of the year, with all enterprise loans
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：Securities Daily
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