Is there any room to cut the quasi-interest rate in 2020? The central bank said
At the press conference on financial statistics, the heads of the relevant departments of the central bank answered questions about the growth rate of social financing that the market cares about, whether it will lower the quasi-rate and interest rate in 2020, and how to further support small and micro enterprises.
On January 16, financial statistics for 2019 were released. In December 2019, broad money (M2) increased by 8.7% year-on-year, an increase of 0.5 percentage points month-on-month, and new RMB loans increased by 1.14 trillion yuan. The annual increase in social financing was 25.58 trillion yuan, an increase of 3.08 trillion yuan over the previous year.
At the press conference on financial statistics held on the same day, the heads of the relevant departments of the central bank answered questions about the growth rate of social finance that the market cares about, whether it will reduce the quasi-rate and interest rate in 2020, and how to further support small and micro enterprises.
Social Finance Indicators Expanded
Central Bank: The growth rate of social finance is not as high as possible
According to preliminary statistics from the central bank, the stock of social financing at the end of 2019 was 251.31 trillion yuan, an increase of 10.7% year-on-year, the same as the previous two months, and the growth rate was 0.4 percentage points higher than the same period last year. The annual increase in social financing was 25.58 trillion yuan, an increase of 3.08 trillion yuan over the previous year.
It is worth mentioning that the social financial indicators have been expanded again. Since December 2019, the central bank has included “national bonds” and “general government bonds” into the statistics of social financing, and merged them with the “special bonds for local governments” into the “government bonds” indicator. Previously, “deposit-based financial institution asset-backed securities”, “loan write-offs”, and “local government special bonds” were included in the social financing scale statistics in July and September 2018.
Social finance is an original macro-control indicator in China, which measures the scale of various types of funds invested by financial institutions into the real economy. At the press conference, Ruan Jianhong, the director of the Department of Investigation and Statistics of the Central Bank, introduced that from December 2019, government bonds and local government general bonds will be included in social finance statistics, making the data more complete. The revised social finance increased by 10.7% year-on-year, which was 0.1 percentage point lower than before the revision. The incremental funds were used to support the construction of the real economy. “The social finance indicator is not as high as possible, and it is reasonable. If it is too high, it will push up the level of leverage in the whole society, and it will bring inflationary concerns. If it is too low, it will reflect that the financial institutions are insufficient to serve the real economy.”
The steady growth of social financing also ensures that the macro leverage ratio remains stable. Wen Bin, chief researcher of China Minsheng Bank, said that in December 2019, the social financial growth rate was 10.7% year-on-year, achieving the goal of matching the growth rate of M2 and social financing in the government work report last year with the nominal GDP growth rate. . “Among them, the three balances of off-balance sheet financing such as entrusted loans, trust loans and undiscounted bank acceptance bills accounted for a total of 8.9%, a decrease of 1.66 percentage points from the previous year, indicating that the effectiveness of shadow banking governance has further manifested.” Wen Bin said.
M2 growth jumped to 8.7%
Central Bank: the result of adherence to a prudent monetary policy
According to data released by the central bank, at the end of December 2019, the balance of M2 was 198.65 trillion yuan, an increase of 8.7% year-on-year, and the growth rates were 0.5 and 0.6 percentage points higher than those at the end of the previous month and the same period of the previous year; the narrow currency (M1) balance was 57.6 trillion yuan. , An increase of 4.4% year-on-year, the growth rate was 0.9 and 2.9 percentage points higher than the end of last month and the same period of the previous year; the balance of currency in circulation (M0) was 7.72 trillion yuan, an increase of 5.4% year-on-year. Net cash paid for the year was 398.1 billion yuan.
M2 growth exceeded market expectations. Many brokerages had previously expected that the growth rate of M2 would increase. On the one hand, due to the influence of bank year-over-year factors, liquidity in December increased significantly compared with November, and demand for money increased; on the other hand, the upward CPI will also increase. The high nominal GDP growth rate will increase the corresponding M2, but it is estimated that the growth rate may be 8.3%.
Regarding the year-on-year growth rate of 8.7% in December, Ruan Jianhong said that this is the result of the central bank’s adherence to a prudent monetary policy, adherence to counter-cyclical regulation, and the policy’s pertinence and effectiveness.
Wen Bin believes that the “divergence” between the growth of M2 and credit and social financing has improved. The first reason is that the central bank has further increased medium and long-term liquidity supply, stable market liquidity, guided banks to increase funding, and enhanced deposit derivation capabilities to promote M2. Growth; Second, China ’s trade surplus in December last year was US $ 46.79 billion, a new high since the second half of last year. As the RMB exchange rate has turned from depreciation, it is expected that foreign exchange contributions will improve and the base currency will be increased.
Talk about whether there is room for lowering the RRR and interest rates in 2020
The central bank: whether to cut interest rates, we must focus on the actual interest rate of the loan, and there is limited room for the RRR cut
This year’s New Year’s Day Central Bank announced a RRR cut. Recently, it has continued to carry out reverse repurchase and medium-term loan facility (MLF) operations, injecting 700 billion yuan into the market, and the amount of investment has approached the 800 billion yuan released by a full-scale reduction of 0.5 percentage points. However, as the liquidity gap still exists during the Spring Festival, many institutions speculate that there may still be “rate cuts” in the first quarter.
At the 16th press conference, when asked what “interest rate” the current interest rate cut might mean, Sun Guofeng, director of the central bank ’s monetary policy department, said that as interest rate market-oriented reforms continue to advance, more attention should be paid to changes in real interest rates. Last year’s market interest rate fell overall, and liquidity remained reasonably plentiful. In December last year, bond repurchase fell by 1 percentage point from the 2018 high, and the yield on 10-year government bonds fell by 0.85 percentage point.
“Of the new loans issued in December, the general loan interest rate was 5.74%, the lowest level since the second quarter of 2017, which was 0.55 percentage points lower than the 2018 high. Among them, after the LPR reform in August 2019, the new general loan interest rate fell by 0.36 Percentage points, the decline is more than LPR, indicating that the efficiency of interest rate transmission is improving. “Sun Guofeng said.
He said that to observe whether to reduce interest rates, the focus is still on the actual interest rate of loans. The level of real interest rates has dropped significantly, especially for small and micro enterprises. The interest rates on loans for small and micro enterprises have dropped significantly. It is 4.73%, which is 0.7 percentage point lower than the 2018 average. Sun Guofeng also mentioned that the benchmark deposit interest rate will be retained for a long time. In the future, it will be appropriately adjusted in accordance with the State Council ’s deployment and comprehensive consideration of economic growth.
Regarding whether there is room for downgrade, Sun Guofeng said that the average statutory deposit reserve ratio of financial institutions is 9.9%, and the minimum deposit reserve ratio of small and medium banks has dropped to 6%. “China’s statutory reserve ratio is at a moderate level, according to Macro-control needs, there is room for further reduction of the deposit reserve ratio, but space is limited. “
Talking about the difficulty of responding to the first loan of small and micro enterprises
The central bank: continue to use technology to empower and strictly control the proportion of real estate in new credit resources
Although financial institutions have been increasing their focus on small and micro enterprises in recent years, small and micro enterprises still face the problem of “first loan difficulties”. Data show that there are about 30 million small and micro enterprises and 73 million individual industrial and commercial enterprises in China. About 18 million households received loans from banks, accounting for only 17.5%, and more than 80% of private and small and micro enterprises (individual industrial and commercial households) did not obtain loans from the banking system.
Zhou Xuedong, director of the General Office of the Central Bank, said at the meeting that a series of policies and measures were introduced last year, which have achieved positive results in alleviating the financing difficulties and expensive financing of small and micro enterprises. This year, we must better alleviate the financing difficulties of small and micro enterprises. The problem of expensive financing.
“What we may focus on this year is not only the first loan, but also a series of indicators that reflect the difficulty of financing, such as renewal loans and credit loans. Specifically, to further improve the financial service level based on the original basis, we must promote the transformation of commercial banks. The business philosophy is to continue to strictly control the proportion of real estate in new credit resources, implement incremental optimization of credit resources and stock adjustments, and promote financial institutions to increase credit allocation to the real economy such as small and micro enterprises. “Zhou Xuedong said.
He also said that it is necessary to continue to use technological empowerment, improve service capabilities, encourage financial institutions to increase financial technology investment, use big data cloud computing and other technologies, establish risk pricing and management control models, transform credit approval processes, and improve customer identification and credit Delivery capacity.
Beijing News reporter Cheng Weimiao
Editor Li Weijia, Chen Shiyi, Proofreading, Lu Qian