The report pointed out that on the whole, a prudent monetary policy is flexible and moderate, maintaining continuity, stability and sustainability, enhancing the efficiency of policy transmission, and further improving the quality and efficiency of financial support for the real economy. The growth stability of total credit increased. From June to September, RMB loans increased by 18.08 trillion yuan, a year-on-year increase of10.36 trillion yuan; At the end of September, the stock of RMB loans, broad money (M2) and social financing increased by 1 1.2%, 12. 1% and 10.6% respectively. The credit structure continued to be optimized. At the end of September, the balance of inclusive micro-loans and medium-and long-term loans in manufacturing industry increased by 24.6% and 30.8% respectively. The loan interest rate has steadily declined. In September, the weighted average interest rate of corporate loans was 4.0%, down 0.59 percentage points year-on-year, which was the lowest level since statistics. The foreign exchange market is running smoothly, and the RMB exchange rate is expected to be generally stable.
Regarding the main policy ideas for the next stage, the report pointed out that it is necessary to intensify the implementation of a prudent monetary policy, do a good job of cross-cycle adjustment, take into account short-term and long-term, economic growth and price stability, internal balance and external balance, and persist in not engaging in "flooding" and not issuing excessive money to provide stronger and higher-quality support for the real economy. Attach great importance to the potential possibility of rising inflation in the future, especially the changes in the demand side, constantly consolidate the favorable conditions for the stable production of grain and the stable operation of the energy market in China, properly deal with it, and keep the price level basically stable.
Wang Qing, chief macro analyst of Oriental Jincheng, said: "This means that in the short term, considering internal and external factors, monetary policy will be mainly guided by structural tools, including lowering the five-year LPR quotation and increasing targeted support for real estate. Focusing on stabilizing the foreign exchange market and paying attention to the potential possibility of future inflation warming, it is less likely to implement interest rate cuts and RRR cuts before the end of the year. "
Implementing differentiated housing credit policy based on city policy
It is worth noting that since the beginning of this year, the central bank and other regulatory authorities have repeatedly lowered the interest rate of the first home loan. On September 29th, 2022, the People's Bank of China and the China Banking Regulatory Commission issued a notice, deciding to relax the lower limit of the first home loan interest rate in some cities by stages. Eligible city governments can independently decide to maintain, reduce or cancel the lower limit of the first set of local new housing loan interest rates before the end of 2022.
According to the Report, the policy aims at cities where the sales price of newly-built commercial housing continues to decline from June to August 2022 (according to the data of 70 major cities published by the National Bureau of Statistics, there are 23 eligible cities), and the lower limit of the first commercial personal housing loan interest rate will be relaxed in stages until the end of 2022. This policy is aimed at the first set of commercial personal housing loans, and it is phased. The original policy will be automatically restored after it expires at the end of 2022. This arrangement is not only conducive to the conditional city government to make full use of the policy toolbox in accordance with the principle of "policy for the city", but also conducive to better supporting the demand for rigid housing. It also reflects the position that houses are used for living, not for speculation, and maintains the stable and healthy development of the real estate market.
According to the report, after the introduction of the policy, some city governments responded positively and made corresponding adjustments. Cities such as Jining, Shandong, Huanggang, Qingyuan, Yangjiang, Wenzhou, Zhoushan, Zhejiang, etc. adjusted the lower limit of the interest rate of the newly issued first home personal housing loan from LPR minus 35 basis points to LPR minus 60 basis points, with a decrease of 15 to 40 basis points; Some cities in Hubei and Guangdong have gradually cancelled the lower limit of the interest rate of individual housing loans for the first set of new houses. From the actual commercial personal housing loan interest rate, the new personal housing loan interest rate in June 2022 was 4.3%, down 4 basis points from the previous month and down 133 basis points from the end of last year.
In the next step, the central bank will continue to adhere to the positioning that houses are used for living, not for speculation, fully implement the long-term real estate mechanism, implement differentiated housing credit policies according to the city's policies, better meet the reasonable housing needs of buyers, and promote the stable and healthy development of the real estate market.
Wang Qing said that in September, the interest rates of newly issued corporate loans and residential mortgage loans both fell beyond the policy interest rate, indicating that the effect of LPR reform was further released. In addition to the central bank keeping the market liquidity reasonable and abundant and reducing the wholesale financing cost of banks in the money market, a key reason is that commercial banks started a new round of deposit interest rate reduction in September, which greatly reduced the capital cost of banks and gave banks the motivation to reduce the actual loan interest rate of enterprises and residents.
Wang Qing judged that with the steady growth and demand increase in the fourth quarter, the regulatory authorities continued to emphasize "promoting the reduction of corporate financing and personal consumption credit costs", and the effect of LPR reform will be further released in the future. Its sign is that the 5-year LPR offer may be further lowered by 15-30 basis points before the end of the year under the condition that the MLF interest rate remains unchanged. The main driving force is the further release of the deposit interest rate reduction effect in September. Effectively reducing the mortgage interest rate of residents is the key to promoting the property market to stabilize and rebound as soon as possible, which will help stabilize growth and control risks in the fourth quarter. The 5-year LPR quotation may be lowered to 1 1 at sunset in October.
Strengthen the implementation of prudent monetary policy
Regarding the thinking of monetary policy in the next stage, the report pointed out that it is necessary to strengthen the implementation of prudent monetary policy, do a good job of cross-cycle adjustment, take into account short-term and long-term, economic growth and price stability, and balance between internal and external, and insist on not "flooding" and not issuing excessive money to provide stronger and higher-quality support for the real economy. Maintain a reasonable and sufficient liquidity, guide policy-oriented and development banks to make full use of the quota of policy-oriented development financial instruments and the new credit line of 800 billion yuan, guide commercial banks to expand medium and long-term loans, maintain a reasonable growth in the money supply and social financing scale, and strive to achieve better results in economic operation.
In addition, we attach great importance to the potential possibility of rising inflation in the future, especially the changes in the demand side, constantly consolidate the favorable conditions for the stable production of grain and the stable operation of the energy market in China, properly respond to it, and keep the price level basically stable. Implement inclusive micro-loan support tools, carbon emission reduction support tools and special re-loans to support clean and efficient use of coal, scientific and technological innovation, universal pension, transportation and logistics, and equipment renovation, and strengthen support for key areas, weak links, industries and market players seriously affected by the epidemic. Implement a long-term mechanism for financial services for small and micro enterprises and private enterprises, and enhance the vitality of micro-subjects.
In terms of interest rate, we will continue to deepen the reform of interest rate marketization, optimize the central bank's policy interest rate system, give play to the important role of the market-oriented adjustment mechanism of deposit interest rate, focus on stabilizing the debt cost of banks, release the reform efficiency of quoted interest rate in the loan market, and promote the reduction of corporate financing and personal consumption credit costs. Pay close attention to the spillover effects of economic trends and monetary policy adjustments in major developed economies, give priority to themselves and give consideration to internal and external balance.
Regarding the exchange rate, the report pointed out that we should adhere to a managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies, insist that the market plays a decisive role in the formation of the exchange rate, adhere to the bottom line thinking, strengthen expected management, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Coordinate economic development and risk prevention, maintain the overall stability of the financial system, establish and improve financial risk prevention, early warning and disposal mechanisms, resolutely hold the bottom line that no systematic financial risks will occur, and safeguard the interests of the broad masses of the people.
Regarding real estate, the report pointed out that we should firmly adhere to the position that houses are used for living, not for speculation, insist on not using real estate as a short-term means to stimulate the economy, insist on stabilizing land prices, house prices and expectations, and steadily implement the prudent management system of real estate finance. Make full use of the policy toolbox to support the demand for rigid and improved housing, promote the accelerated use of special loans for Baojiao Building and increase efforts as needed, guide commercial banks to provide supporting financing support, and safeguard the legitimate rights and interests of housing consumers.
Wang Qing believes that regarding the next direction of monetary policy, the central bank emphasizes "strengthening the implementation of prudent monetary policy, doing a good job of cross-cycle adjustment, taking into account short-term and long-term, economic growth and price stability, internal equilibrium and external equilibrium, and insisting on not' flooding' and not over-issuing money to provide stronger and higher-quality support for the real economy", and emphasizes that "it attaches great importance to the potential possibility of rising inflation in the future". This means that in the short term, considering internal and external factors, monetary policy will be guided mainly by structural tools, including reducing the five-year LPR quotation and increasing targeted support for real estate, while focusing on stabilizing the foreign exchange market and paying attention to the potential possibility of rising inflation in the future. It is unlikely to cut interest rates and RRR before the end of the year.
"In the next step, fiscal policy is expected to become the main force to stabilize the economic market, including accelerating infrastructure investment, further reducing taxes and fees, and increasing consumption. Monetary policy will be coordinated by keeping market liquidity at a reasonable and sufficient level (which means that the recent rapid increase in market interest rates is unsustainable) and supporting banks to increase credit supply (which means that the year-on-year increase in 10 loans is a short-term fluctuation, and the overall loan supply will maintain the momentum of year-on-year increase in the fourth quarter). Wang Qing said.