Affected by factors such as the positive momentum of macroeconomic development and the marginal increase in bank debt costs, the loan market quoted interest rate (LPR) remained unchanged in March. After a 25 basis point decline in LPR over two periods in October 2024, LPR remained unchanged for five consecutive months. On March 20, the People's Bank of China authorized the National Interbank Funding Center to announce that the 1-year LPR was 3.1%; The LPR for a period of 5 years or more is 3.6%. Under the influence of internal and external factors, LPR remains inactive. In terms of internal factors: Firstly, as the pricing anchor of LPR, the policy interest rate for 7-day reverse repo operation remains unchanged; Secondly, against the backdrop of pressure on bank debt costs and a decline in net interest margins, there is insufficient motivation for quoting banks to lower their LPR quotes by adding points. According to data from the State Administration of Financial Supervision and Administration, the net interest margin of commercial banks in the fourth quarter of 2024 decreased to 1.52%, a decrease of 0.01 percentage points from the third quarter. The net interest margin has hit a new historical low, "said Wang Qing, Chief Macro Analyst at Dongfang Jincheng." Due to measures to prevent idle funds, curb the rapid downward trend of long-term bond yields, and new regulations on interbank deposit supervision, the yield to maturity of DR007 and interbank certificates of deposit have increased since the beginning of this year, and the marginal cost of bank funds has risen. Despite the central decline in the funding interest rate in March compared to February, the overnight interest rate remained above 1.8%, and the one-year certificate of deposit interest rate fluctuated around 1.95%, resulting in high debt pressure on commercial banks. From the perspective of assets, the central margin of the March bill interest rate rebounded, and in the environment of loan interest rates falling to a historical low, the urgency for further decline in LPR is not strong The Chief Economist of CITIC Securities clearly stated. In addition, some analysts believe that the policy interest rate and LPR in March continued to remain unchanged, and the fundamental reason is that the macroeconomic growth momentum has remained strong since the beginning of this year, driven by the continued effect of a package of incremental policies. The growth rate of consumption and investment is accelerating, and the necessity and urgency of interest rate cuts are not strong, "said Wang Qing. In terms of external influencing factors, Mingming stated that the Federal Reserve's March FOMC meeting will continue to postpone the interest rate cut process, and the current offshore RMB exchange rate is stable in the range of 7.2 to 7.3 yuan. The US China interest rate differential has fallen compared to the high point in January, but there is still uncertainty. It is expected that the total quantity tool will be implemented at an appropriate time while balancing internal and external goals. Looking ahead, analysts say that there is still ample room for a moderately loose monetary policy. In terms of interest rates, Pan Gongsheng, the governor of the People's Bank of China, said that there is room for a downward trend in the interest rate of funds as a structural monetary policy tool; We will optimize the policy of re lending for technological innovation and transformation, and reduce the re lending interest rate. His proposal of "continuously strengthening the implementation and supervision of interest rate policies" will also help broaden the space for interest rate policies. To promote the reduction of comprehensive financing costs in society, comprehensive measures are needed. Structural interest rate cuts can also help further reduce the funding costs of commercial banks, encourage banks to increase their support for the real economy, and promote a steady decline in the costs of enterprise financing and resident credit Analysts say that facing the uncertainty of internal and external situations, it is expected that this year's monetary policy will be reasonably balanced and coordinated in terms of overall quantity, structure, interest rates, exchange rates, and other aspects. (New Society)