China’s monetary policy implementation report for the third quarter of 2021 From People’s Bank of China

The following is the China’s monetary policy implementation report for the third quarter of 2021 From People’s Bank of China recommended by recordtrend.com. And this article belongs to the classification: Chinese economy, research report.

*** In the third quarter of 2021, the gross domestic product (GDP) increased by 4.9% year-on-year, with an average growth of 4.9% in two years; In the first three quarters, the consumer price index (CPI) rose by 0.6% year-on-year, the employment situation was generally stable, and the import and export trade maintained rapid growth.

*** Effectively prevent and control financial risks and create a suitable monetary and financial environment for high-quality economic development.

First, maintain reasonable and sufficient liquidity. On July 15, the reserve requirement was reduced by 0.5 percentage points, releasing about 1 trillion yuan of long-term funds. We will make comprehensive use of various monetary policy tools such as RRR reduction, refinancing, rediscount, medium-term lending facilities and open market operation to meet the reasonable liquidity needs of financial institutions and guide the smooth operation of money market interest rates around open market operation interest rates. We will promote the reform of the operation mode of standing loan facilities and enhance the liquidity stability of the banking system. Second, give full play to the leading role of structural monetary policy tools. We will increase the amount of small re loans by 300 billion yuan, strengthen the rescue and assistance to small, medium-sized and micro enterprises, implement the extension of two monetary policy tools directly to the real economy, comprehensively implement policies to support regional coordinated development, and increase policy support for scientific and technological innovation, small and micro enterprises, green development, manufacturing and other fields. Third, continue to release the reform dividend of quoted interest rate (LPR) in the loan market. Further give play to the guiding role of the quoted interest rate in the loan market, promote the steady decline of the actual loan interest rate, optimize the supervision of deposit interest rate, reduce the cost of bank liabilities, and continue to promote all kinds of lenders to express the annualized loan interest rate. Fourth, we should focus on ourselves and grasp the balance between internal balance and external balance. We will deepen the market-oriented reform of the exchange rate, maintain the flexibility of the RMB exchange rate, strengthen the management of expectations, and give play to the functions of the exchange rate as a macroeconomic regulator and an automatic stabilizer of the balance of payments. Fifth, adhere to the principle of marketization and rule of law, coordinate development and security, effectively prevent and control financial risks, and firmly hold the bottom line of no systemic financial risks.

On the whole, China adheres to the implementation of normal monetary policy, grasps the strength and rhythm of prudent monetary policy, comprehensively studies and judges the marginal changes of domestic and foreign economic and financial situation and the possible monetary policy adjustments of major economies, takes the initiative to make forward-looking arrangements, the strength of financial support for the real economy remains stable, and the financial market operates smoothly. At the end of September, broad money (M2) increased by 8.3% year-on-year, and the stock of social financing scale increased by 10% year-on-year. The credit structure continued to be optimized. At the end of September, the year-on-year growth rate of Pratt & Whitney small and micro loans and medium and long-term loans in manufacturing industry reached 27.4% and 37.8% respectively. In September, the weighted average interest rate of enterprise loans was 4.59%, and the loan interest rate of Pratt Whitney small and micro enterprises was 4.89%, down 0.02 and 0.19 percentage points respectively compared with December of last year. The money market interest rate was stable. From January to September, the average 7-day repo weighted average interest rate (dr007) of deposit institutions in the inter-bank market was 2.18%, which was only 2 basis points different from the 7-day open market operating interest rate of the central bank. The RMB exchange rate fluctuated in both directions and remained basically stable at a reasonable and balanced level. At the end of September, the central parity rate of RMB against the US dollar was 6.4854 yuan, an appreciation of 0.6% over the end of the previous year. In the first three quarters, the annualized fluctuation rate of RMB against the US dollar was 3.2%.

China is a super large economy with strong toughness. The long-term fundamentals of the economy have not changed, the characteristics of great development potential and broad swing space are obvious, and the market players are full of vitality. We must also see novel coronavirus pneumonia and the new global epidemic of the new pneumonia outbreak. The external environment is more complex and severe. The domestic economic recovery is facing some structural constraints. *** We will deepen supply side structural reform, accelerate the construction of a new development pattern, build a modern central bank system, improve the framework of modern monetary policy, and promote high-quality development. We will strengthen the study, judgment and analysis of marginal changes in the economic situation at home and abroad, coordinate the connection of macro policies this year and next, adhere to a more prominent position in serving the real economy, maintain the stability of monetary policy, stabilize market expectations, and strive to keep the economy running within a reasonable range.

A prudent monetary policy should be flexible, accurate, reasonable and appropriate. We should focus on ourselves, keep the word steady, grasp the strength and rhythm of policies, handle the relationship between economic development and risk prevention, make cross cycle adjustment, maintain the overall stability of the economy and enhance the resilience of economic development. We will improve the money supply regulation mechanism, maintain reasonable and sufficient liquidity, enhance the stability of the growth of total credit, keep the growth rate of money supply and social financing basically match the economic growth, and maintain the basic stability of macro leverage. Closely follow, study and judge the price trend, stabilize social expectations and maintain the overall stability of price level. Give full play to the role of structural monetary policy tools, make good use of the newly increased 300 billion yuan of small refinancing line, implement the extension of two monetary policy tools directly to the real economy, make good use of the 200 billion yuan of refinancing line to support regional coordinated development, implement carbon emission reduction support tools, and establish a 200 billion yuan special refinancing line to support clean and efficient utilization of coal, Guide financial institutions to continue to increase support for key areas and weak links such as small, medium-sized and micro enterprises and green development. We will improve the formation and transmission mechanism of market-oriented interest rates, continue to release the efficiency of the reform of quoted interest rates in the loan market, optimize the supervision of deposit interest rates, and promote a steady decline in the comprehensive financing costs of small and micro enterprises. Deepen the market-oriented reform of exchange rate, enhance the flexibility of RMB exchange rate, strengthen expectation management, improve the macro Prudential Management of cross-border financing, guide enterprises and financial institutions to adhere to the concept of “risk neutrality” and maintain the basic stability of RMB exchange rate at a reasonable and balanced level. Adhere to the bottom line thinking, enhance the system concept, follow the principle of marketization and rule of law, and do a good job in the prevention and resolution of major financial risks. We will promote the recovery of economic stability and strive to achieve the main objectives and tasks of economic development this year.

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