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Original title: Central bank will comprehensively implement policies to reduce the cost of social finance
Beijing Business Daily (Reporter Yue Pinyu Liu Sihong) On November 26, the Central Bank released the “Report on the implementation of Chinese monetary policy in the third quarter of 2020” (hereinafter referred to as the “Report”). The “Report” pointed out that since the beginning of this year, the central bank has introduced monetary policy response measures involving 9 trillion yuan in money market funds. In the first 10 months, the financial sector donated about 1.25 trillion yuan to the real economy. Overall, sound monetary policy embodies forward-looking, proactive, precise and effective monetary policy, with remarkable results, further improvement in transmission efficiency and solid financial support for the real economy. In the next phase, the central bank will implement comprehensive policies to promote a significant reduction in social financing costs and play the decisive role of the market in forming the RMB exchange rate.
For example, at the end of September, the general money supply (M2) increased by 10.9% year-on-year and the stock of social finance scale increased by 13.5% year-on-year and the rate of growth was significantly higher than in 2019. The weighted average interest rate on business loans in September was 4.63%, down 0.49 percentage points from December of the previous year. The monetary and credit structure continued to be optimized: at the end of September, included small and micro loans increased by 29.6% year on year and medium and long term loans to the manufacturing sector increased by 30.5% on annual basis. The RMB exchange rate fluctuates in both directions and remains broadly stable at a reasonable and balanced level.
At present, our country has moved into a high-quality development stage and has many advantages and conditions for continuous development. However, the central bank also pointed out that to see the international environment become more and more complex, instability and uncertainty increased significantly, the domestic economy is facing many challenges, there are still some structural, institutional and cyclical problems in economic operations. and development is not entirely balanced. The problem is still pending.
Based on this, the central bank has defined the political thinking for the next stage. On the one hand, we will implement the new development concept, build a new development model, improve macroeconomic governance, do a good job in designing cross-cutting policies and promote aggregate economic equilibrium, structural optimization and internal balance and external. Build a modern central bank system, improve the money supply control mechanism, improve the market-based interest rate formation and transmission mechanism, and build a financial system to effectively support the real economy.
At the same time, a prudent monetary policy is more flexible, moderate and precise, to better meet the needs of high-quality economic development and to pay more attention to the quality and efficiency of financial services for the real economy. Improve the money supply control mechanism and scientifically grasp the intensity, pace and focus of monetary policy operations in accordance with the macro situation and market needs, while maintaining reasonable and sufficient liquidity, preventing the market from being short of money and not resolutely committing to “overflow” or allow The market money overflows.
Furthermore, we will improve the market-based interest rate formation and transmission mechanism, we will deepen the reform of listed interest rates on the loan market, we will continue to unlock the potential of reforms to promote lower loan interest rates, we will implement comprehensive policies to promote a significant reduction in social financing costs and we will play the decisive role of the market in the formation of the RMB exchange rate. Strengthen the precise drip irrigation function of structural monetary policy instruments and improve policy immediacy. Pay attention to the management of advances and maintain stable price levels. Manage internal and external balances and long- and short-term relationships, implement normal monetary policies for as long as possible and keep the macro leverage ratio substantially stable.
Zhou Maohua, an analyst at Everbright Bank’s financial markets department, commented, “Monetary policy is not a panacea. From a long-term perspective on domestic issues, the key solution is to unlock the potential of the domestic economy through structural reforms. on the supply side and promote the domestic economy towards high quality development; Maintain monetary policy for as long as possible, avoid flooding and avoid political sequelae “.
It is worth mentioning that the central bank has fixed the housing market once again: it will adhere firmly to the positioning that homes are used for living, not for speculation, it will insist on not using real estate as a short-term means to stimulate economy and will insist on stabilizing land prices, house prices and stability. It is planned to maintain the continuity, coherence and stability of the real estate financial policy and to implement the prudential real estate financial management system.
The central bank stressed that it will continue to fight the tough battle to prevent and resolve key financial risks, improve financial risk prevention, early warning, disposal and liability systems, maintain financial security and firmly maintain the bottom line to avoid systemic financial risks. Driving by innovation, driving by high quality supply and creating new demand, accelerates the formation of a new development model with national and international cycles as a pillar and mutual promotion of national and international cycles.
Zhou Maohua said: “Next, we need to strictly control the currency gate, more precise drip irrigation, improve policy quality and efficiency, and optimize the macro leverage structure. Monetary policy adjustments will be” self-oriented “and flexibly adapted according to macroeconomic development trends”.
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