|
LPR unchanged in September: 3.65% for 1 year, 4.3% for 5+ years The LPR quotations released in September, as widely expected by analysts, remained unchanged. On Tuesday, September 20, the People's Bank of China authorized the National Interbank Funding Center to announce the latest LPR quotation: 1-year LPR was 3.65%, compared with 3.65% last time; LPR over 5 years was 4.3%, compared with 4.3 last time. % remained unchanged, in line with expectations. The above LPRs are valid until the next LPR is issued. Since the beginning of this year, the LPR has been adjusted three times, and the 1-year LPR and the 5-year LPR have decreased by 15 basis points and 35 basis points respectively. The unchanged LPR in September is in line with expectationsMLF interest rate is the indicator of LPR. On September 15, the central bank announced that in order to maintain reasonable and sufficient liquidity in the banking system, the central bank launched a 400 billion yuan one-year medium-term lending facility (MLF) operation and a 2 billion yuan 7-day open market reverse repurchase operation on that day, and MLF won the bid. The interest rate was 2.75%, unchanged from the previous value. Previously, the LPR quotation results announced on August 22 showed that the 1-year LPR was reduced by 5 basis points, and the 5-year and above LPR was reduced by 15 basis points. On the whole, the MLF interest rate remained unchanged in September, which means that the basis for the LPR quotation in the month has not changed. In addition, the LPR quotation in August has just undergone asymmetric downward adjustment, so it is expected that the LPR quotation will remain unchanged. Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, believes that the LPR remained unchanged in September, which was basically in line with expectations. First, the LPR interest rate was significantly lowered in August. Second, the bank's net interest margin pressure. Since the beginning of the year, it has continued to benefit the real economy. The 1-year and 5-year LPR interest rates have been reduced by 15BP and 35BP respectively. Some banks have protected their net interest margins and enhanced their operational stability. Third, the demand for physical financing has gradually recovered. Judging from the financial data in July and August, the financing of the real economy has gradually recovered, the structure has been continuously optimized, and the policy effect has gradually emerged. In addition, Zhongtai Securities also predicted that the LPR in September may remain unchanged. It believes that the reduction of deposit interest rates by many large state-owned banks last week is the result of easing the pressure on the debt side, and does not necessarily lead to the reduction of LPR interest rates this month.The reduction of deposit interest rate opens up room for future reduction of LPRIt is worth mentioning that, under the effect of the reform of deposit interest rate, since September 15, many large state-owned banks have lowered the interest rate of personal deposits again, including demand deposits. The interest rates of various types of deposits, including time deposits, have been fine-tuned to varying degrees. Among them, the interest rates of three-year time deposits and large-denomination certificates of deposit were reduced by 15 basis points, indicating that the weighted average interest rate of subsequent deposits will continue to decline. Guotai Junan believes that the reduction of deposit rates by most major banks this time is a follow-up result of the rate cut in August. Unlike April, it does not mean that LPR will be lowered separately in September and October. However, the agency pointed out that this can objectively reduce the pressure on banks to reduce LPR in the future and open up space for LPR reduction. "In the next stage, the decline in deposit interest rates is expected to further open up space for LPR reduction." Wen Bin, chief economist of China Minsheng Bank, also said that at present, the contradiction between credit supply and demand is still large, and the cumulative decline in 5Y-LPR this year has reached 35bp. After the re-pricing in the first quarter of next year, it will greatly squeeze the bank's revenue, so it is imperative to further control the cost of bank liabilities. CITIC Securities believes that in August, the LPR was reduced under the dual drive of the central bank’s interest rate cut and the cost reduction on the bank’s liability side. There is still room for further pressure reduction in the future LPR, but it is more likely to refer to May. The core of driving the increase and compression is the decline of deposit costs and the release of space on the liability side. Wang Qing, chief macro analyst at Dongfang Jincheng, said that considering various factors, it is expected that even if the policy interest rate (MLF interest rate) does not change in the future, there is still room for a downward adjustment of about 20-30 basis points in the 5-year LPR quotation before the end of the year. Zhou Maohua pointed out that from the trend point of view, there is still room for the LPR interest rate to be lowered. The main reasons are that the domestic economy has maintained a recovery trend, the quality and efficiency of bank operations have been continuously improved, and the banking sector has maintained overall profitability; interest rate reform has opened up room for market-oriented adjustment of deposit interest rates to a certain extent; and monetary policy has remained flexible and appropriate. This article is from Wall Street News, welcome to download the APP to see more |