Analysis Of Reasons For Short-Term Central Bank Interest Rate Rise

In June 8th, the central bank issued a 25 billion yuan one year central bank ticket by price bidding, with a reference rate of 2.0929%.

Following the 8.32 base points increase last week, the issuance rate of the 1 - year central issue rose again this week, rising by 8.33 basis points.

The annual interest rate of 2.09% is nearly the highest since November 2008.

In this regard, the Bank of communications financial research center researcher pointed out that this directly reflects the interbank market demand for long term central bank demand, and the demand for short-term central bank demand is not strong, so the central bank raised the one-year and March central bank interest rates to guide investment in funds.

He also said that short-term central bank interest rate increase can not simply be interpreted as a signal to raise interest rates.

Recently, the uncertainty of domestic macro-economy is increasing. On the one hand, the impact of the European debt crisis is further expanding, which may lead to the two dip of the world economy.

In addition, domestic inflation pressure is also increasing, and a new round of market pressure policy may reduce domestic economic growth.

Various factors make uncertainty the only determinacy of the economic trend. Therefore, the central bank needs to reserve space for policy control in the later stage, and to increase the short-term central bank issue is the most effective way for the central bank to expire in the second half of the year.

According to the forecast of the stock market weekly, CPI is expected to grow by 3.02% over the same period, which will exceed the target of "CPI control within 3%" set at the beginning of the year. And some economists have analyzed that the actual inflation rate is far more intense than the CPI data. The actual inflation rate has been more serious, and even some claims that "hyperinflation" has occurred in China.

Based on the strong inflationary pressure, the central bank "tight" is imperative.

However, due to the worsening European debt crisis, the euro zone economic growth is not optimistic.

Statistics show that, as China's largest export market, if the EU's economic growth is down by 1 percentage points, China's export growth will drop by 6 percentage points.

Meanwhile, the spread of the debt crisis will exacerbate the depreciation of the euro to the US dollar and RMB, which will further affect China's exports. Since April this year, the renminbi has appreciated nearly 15% against the euro, which has increased the pressure on domestic export enterprises.

In addition, domestic regulation of the property market, the risk of domestic economic growth decline is also increasing.

The central bank faces more uncertainties and more complicated policies.

Further tightening may lead to the risk of a renewed economic downturn and make the subsequent financing of the "4 trillion project" under construction difficult.

Without tightening, inflation will further deteriorate.

Recent policies have also highlighted the dilemma of policymakers.

In mid May, the central bank suspended the two month net return process, and the open market put 224 billion yuan into the market, and this month, it will usher in another 780 billion yuan of funds.

In addition, in May 26th, the Insurance Regulatory Commission raised the proportion of investment proportion of insurance companies to 25%.

The purpose of these operations is to relieve liquidity stress.

Therefore, short-term central bank votes become the first choice of the central bank's macroeconomic regulation and control.

In the short term, it can tighten market liquidity, curb inflation and test the affordability of the money market.

In the second half of the year and the first half of next year, the central bank will set aside space for the central bank to reserve policy. Once the risk of a hard landing occurs, the central bank can release liquidity in time and grasp the initiative of policy control.