The Deposit Reserve Ratio Raises Inflation Pressure Or Raises Interest Again.

the people Bank On the evening of 14, it announced that the RMB deposit reserve of financial institutions should be raised from January 20th. Gold rate 0.5 percentage points, the central bank's first policy tightening in 2011. After this increase, large financial institutions deposit The reserve rate will reach a high level of 19%. Rough estimates can freeze the liquidity of the banking system at about 350 billion yuan.

Economists believe that this increase is intended to hedge too much liquidity, and in early January nearly 500 billion of new loans. Taking into account that the central bank reached 1 trillion and 600 billion in the first quarter of this year, and in line with the differential reserve ratio and other policies, it is expected that the reserve ratio will continue to be raised. In the interest rate policy, due to the current inflation pressure and the residents' inflation expectations are still high, the central bank is more likely to raise interest rates before and after the 20 day statistics.

"This increase is intended to hedge too much liquidity, which may be mainly due to the following three factors. First, massive outflows of fiscal deposits last year failed to return. Second, in January, foreign exchange is estimated to remain high, and conservatism is expected to be above 400 billion. Third, open market operations continue to be weak. After the last increase in interest rates, although the open market operation interest rate upward, but with the two tier market spreads are still large, the operation is weak, so that directly from then on will have to continue to maintain a continuous net release. Lu Zheng commissar of senior economist of Xingye Bank expects that in the first quarter, there will be 2 more reserve requirements.

At the same time, the differential reserve ratio tool will also normalize. In terms of specific operations, the formula set by the central bank can be broadly divided into two aspects. First, it calculates the deviation between the monthly credit growth of banks and the sum of GDP and CPI, and the two is to compare the speed and market share of each bank and the same type of banks. The two growth banks will be adjusted differently.

The agency also believes that the increase in the reserve ratio also shows the government's determination to resist inflation. The Dacheng Fund expects that CPI will be higher in January than in December last year, with weather factors in the first half of the month and the Spring Festival in the latter half of the month. Dacheng Fund believes that due to the high inflation pressure in the near future, the government has recently and is about to adopt a further tightening policy.

Statistics show that food prices rebounded slightly in the first week of January. Moreover, under normal circumstances, the year-end to the Spring Festival period, the price of food is larger than the ring, CPI is difficult to significantly reduce or even exclude the possibility of a new high. "CPI is likely to rush to 5% in one or two months, such as the 12 month weighted average interest rate negative value continues to expand, it is necessary to raise interest rates." According to Ba Shu song, deputy director of the Financial Research Institute of the development research center of the State Council, from a historical perspective, interest rates usually increase at a higher rate of GDP growth, stronger inflation expectations and more serious negative interest rates.

It now appears that the trend of CPI in December 2010 will become the trigger for deciding whether the central bank will increase interest rates in the near future. The official data of the Statistics Bureau will not be released until 20, but at the moment, there are signs that CPI may not be as sharp as the market expected. In the short term, the price rise of agricultural products and the continuous increase of commodity prices caused by climate anomalies will continue to drive the rise of CPI. In the medium to long term, with the recovery of economy and the increase of economic activity, the increase of money circulation speed will also bring more inflationary pressure. There is a view that last December's CPI or about 5%, the first quarter of the inflation pressure can not be ignored. If the current policy tightening is not enough, the self actualization of inflation will further increase the pressure of prices.

According to media reports, Zhou Wangjun, deputy director of the national development and Reform Commission's price department, also said that if the domestic price inflation is too high in the first quarter, new regulatory measures will not be excluded. This statement is understood by the market as a signal of high inflation.