Counter-cyclical adjustment of open market operation interest rates may be reduced

Counter-cyclical adjustment of open market operation interest rates may be reduced
Original title: Counter-cyclical adjustment of open market operation interest rates may be reduced □ Reporter Zhang Qinfeng Peng Yang September, end-of-quarter assessment, fiscal taxation, cash withdrawal before long holidays, etc. may still cause a certain degree of 四川耍耍网 disturbance to liquidity supply and demand, but it may also beThe counter-cyclical policy is timely to create opportunities.The highest official predicts that the liquidity support will be increased at the right time and amount in the short term, and the liquidity replacement will not obviously depart from a reasonable margin. There may be a possibility of a reduction in the MLF operation interest rate in the middle and medium months.  New changes in the market in August If liquidity was abundant at the end of June and early July, and there was a suspicion that there was a significant relaxation in currency operations, then the two major phenomena in August may eliminate market doubts.  The first is that the expected decrease in the open market operation rate has repeatedly failed.In early August, the Fed implemented its first interest rate cut for more than a decade.The market once believed that the predicted long-term adjustment of open market operating interest rates would become a reality.In mid-August, a preliminary announcement was made to improve the loan market quoted interest rate (LPR) formation mechanism, linking LPR with the open market operating interest rate (mainly MLF interest rate).In the context of reducing the actual interest rate of the enterprise, the market’s expectations for the MLF interest rate reduction have once again heated up, but there will be “not moving”.  The second is the upward movement of the money market interest rate operation center in August.On the inter-bank market, the monthly average monthly bond repurchase rate of DR001 has increased by 46 basis points to 2.11%, a new high since June 2018; and included the expected monthly average of DR007 up 14 basis points to 2.64%, the highest since 2019.After long-term observation, short-term money market indicators such as DR007 have proven to be effective indicators for observing the tightness of monetary policy in actual operations.The central shift up in August at least shows that monetary policy has not become more loose that month.  Recently, the State Council’s Financial Stability Development Committee (referred to as the “Financial Committee”) attended the meeting.The meeting pointed out that the reform should be used to solve problems.”Water release” or direct reduction or derating cannot be called “reform methods.”Many experts said that the problem with the current interest rate in the yield market is not low enough, but that the conversion to loan interest rates is not smooth.This is both the support provided by the LPR reform and the reason why the MLF interest rate has not been reduced.  The countercyclical adjustment will intensify. What cannot be surpassed is that the conventional macro policies also retain their due flexibility.In understanding policy orientation, linear extrapolation cannot be simply performed.  The recent Financial Committee meeting proposed that the counter-cyclical adjustment of macroeconomic policies be strengthened.The wording of the July meeting was “moderate countercyclical adjustments in a timely and appropriate manner.”This releases a clearer signal: an increase in counter-cyclical regulation can be expected.  In fact, conditions are becoming mature.First, from the perspective of economic fundamentals, under the resonance of internal and external factors, economic operation is still facing certain downward pressure.Second, the recent financial data reproduces the phenomenon of partial credit contraction, which was more similar to the previous passive contraction of financing. This time it is more likely that the physical financing demand has weakened.Taking into account the constraints of local debt, the impact of substantial breakthroughs, and the issuance of local debt eventually leading to a decline in the amount to be issued, the possibility that subsequent social financing data will continue to decline.From the perspective of stable demand and stable currency financing, counter-cyclical policies should be implemented in a timely manner.Third, the world ‘s economic growth is the highest, mainly to readjust or consider easing monetary policy, to improve the pressure to balance internal and external equilibrium, and to provide more support for the independence of monetary policy.Fourth, after the tightening of real estate financing policies, the liquidity released to real estate may decline, which does not conflict with the “housing and living not speculation” orientation.  From this point of view, the previous policy is not loose, but instead increases the probability of timely adjustment of future policies, and also replaces the space for necessary policy adjustments.The market generally believes that under the current expectations, the probability of an increase in the counter-cyclical expansion rate increases.  The MLF interest rate may be reduced at the end of the quarter in September, and liquidity has attracted much attention.At present, the liquidity stratification that may be caused by the end of the quarter assessment is the main potential risk point of liquidity at the end of September.  Market participants point out that the end-of-season assessment at the end of September and the cash withdrawal before the National Day holiday are all conventional factors that affect the liquidity supply and demand in the second half of September.Affected by individual risk events in the previous period, the financial market risks are reduced. At the end of the quarter, market participants are more concerned about the constraints of counterparty risks and assessment indicators than usual.  However, a number of experts said that liquidity will remain reasonably ample in September. One is the penetration of fiscal expenditure at the end of the quarter, and the other is that the current currency operation is easy to loose and difficult, and the attitude of gradually maintaining a reasonable and ample liquidity is clear.  ”Liquidity will generally remain stable in September, but note that liquidity demand will expand at the end of the quarter.”It is expected that hedging operations will be carried out in advance, so the overall liquidity will remain flat.”The chief analyst of CITIC Securities solid income said clearly.  ”In September, there will be fiscal appropriations, etc., which will also stabilize the funding side.”” Wang Yifeng, chief banking analyst of China Everbright Securities Research Institute, is outstanding.  About liquidity, the market generally believes that the focus of the gradual open market operation in September is mainly the MLF operating rate.Li Yong, chief analyst of Northeast Securities Solid Income, said that there will be 441.5 billion US dollars of MLF due in September.Among them, US $ 176.5 billion due on September 7 and US $ 265 billion due on September 17.  Under the expectation that the Federal Reserve will cut interest rates again in September and that there is still room for LPR downside, experts believe that the MLF interest rate may be lowered in due course.”Since May, long-term MLF operations can be combined to slightly overdo it, and the MLF interest rate may be reduced in September.The first is to drive LPR to guide the lending interest rate downward through MLF, which requires a certain decrease in MLF interest rates; the second is the contradiction in the probability of interest rate cuts by the Federal Reserve in September;Wang Yifeng thought.