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China’s monetary policy implementation report in the fourth quarter of 2020 From People’s Bank of China

The following is the China’s monetary policy implementation report in the fourth quarter of 2020 From People’s Bank of China recommended by And this article belongs to the classification: Chinese economy, research report.

The report points out that judging the trend of short-term interest rates first depends on whether the policy interest rate changes, mainly whether the central bank’s open market 7-day reverse repo operating interest rate changes, and should not pay too much attention to the number of open market operations. The number of open market operations will be flexibly adjusted according to various temporary factors such as finance and cash, as well as market demand. The change does not fully reflect the trend of market interest rate, nor does it represent the change of central bank policy interest rate. Secondly, when observing the market interest rate, we focus on the weighted average interest rate level of the main market interest rate indicator (dr007) and the average value of dr007 over a period of time, rather than the transaction rate of individual institutions or the time point value disturbed by short-term factors.

The report points out that it is necessary to give full play to the precise drip irrigation role of the monetary policy tools of refinancing, rediscount and direct access to the real economy. On the one hand, we should steadily adjust and continue the emergency policies issued in the special period, and continue to implement the two monetary policy tools of the inclusive small and micro enterprises’ deferred repayment of principal and interest and the inclusive small and micro enterprises’ credit loan support plan, which are directly related to the real economy.

The report points out that the next stage is to build an effective financial support system and mechanism for the real economy. We should firmly adhere to the positioning that houses are used for living, not for speculation. We should not use real estate as a short-term means to stimulate the economy. We should keep the land price, house price and expectation stable, maintain the continuity, consistency and stability of real estate financial policy, implement the real estate financial careful management system, and improve the financial support housing rental policy system.

As for the problem of rectifying the innovative products of non-standard deposits, the report shows that after the rectification, by the end of 2020, the balance of time deposit withdrawal in advance and interest bearing products on file has been successfully cleared, with a total pressure drop of 15.4 trillion yuan; the balance of current deposit interest bearing products on file is 1.2 trillion yuan, with a pressure drop of 5.5 trillion yuan compared with that before the rectification, with a pressure drop of more than 81%.

According to the report, in order to guide local legal person banks to better serve the local market and maintain the order of market competition, the people’s Bank of China will incorporate local legal person banks’ absorption of non local deposits into the macro Prudential assessment (MPA) from the first quarter of 2021, and prohibit them from opening non local deposits through various channels, so that the existing deposits will be settled naturally. There is no physical operation network, except for the banks whose business is carried out online. However, the scope of such banks is not limited by space. In fact, they have become banks operating nationwide. Therefore, the self-discipline requirements of deposit interest rate refer to the implementation of state-owned banks.

For the loan interest rate related to the financing cost of the real economy, the report shows that at the end of the fourth quarter of 2020, compared with the end of the third quarter, the weighted average interest rate of general loans decreased by 1 BP to 5.30%, changing the upward trend of the data in the third quarter. Previously, the market once thought that the inflection point of bank loan interest rate had reached.

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