Raising Interest Rates Or Raising The Central Bank To Control The Sword?

With high inflation and deposit reserves

In the numerous intertwined contradictions, in a critical period of carelessness and total loss, how to weave cocoons and tweet and seize the throat of the problem to test the government's macroeconomic regulation and control art.

In June 14th, when the national consumer prices rose by 5.5% over the same period in May, the vigorous and vigorous central bank again raised the deposit reserve ratio of 0.5% of the financial institutions.

On the 20 day, all commercial banks turned in deposit reserve.

Affected by it,

Seeing this signal, the experts who advocated raising interest rates took the lead in taking the position, "this is the signal of raising interest rates.

Since last week, the market interest rate is expected to gradually increase, resulting in the central bank's one or two tier market spreads widening, coupled with liquidity constraints, the central bank to enhance the first level.

"This increase is in line with expectations, and June and July is still a sensitive time point for tightening up."

Li Huiyong, chief macroeconomic analyst at Shenyang Wanguo Securities Research Institute, said there were 1 opportunities to raise interest rates during the year, the time point was June and July.

In addition, another reason for increasing interest rate reaffirms is that the rhythm of January 1 has made the monetary policy instrument of the deposit reserve ratio close to the end, and the adjustment space is gradually narrowing.

So far, the reserve requirement ratio of large banks has reached 21.5%, while the reserve requirement ratio of small financial institutions is as high as 19.5%.

Although the central bank has emphasized that there is no theoretical ceiling on the deposit reserve ratio, experts generally agree that the maximum reserve requirement rate is 23%.

Li Huiyong stressed that the increase in the deposit reserve rate is mainly related to the amount of funds expended in June, which is about 600000000000 yuan, mainly to recover liquidity.

It is not possible to continue to raise the deposit reserve ratio in the second half of the year, but the frequency of the increase will be significantly less than that of the first half of the month.

The timing of the increase depends on the amount of foreign exchange.

Unlike the central bank's preference for quantitative tools, the central bank has been cautious about raising interest rates because of concerns that the increase in interest rates will bring about the risk of hot money.

Since last year, the central bank has only raised interest rates 4 times, which is the 1/3 of raising the deposit reserve ratio.

Shen Jianguang, managing director of Mizuho Securities Asia, wrote that the duration of negative interest rates generally can not exceed the long time, because long-term negative interest rates will cause serious losses to household savings, resulting in more channels for value seeking by capital, thereby inducing new price increases.

The increase in deposit interest rate can alleviate the wealth pfer of residents and play a good role in stabilizing inflation expectations.

More and more negative interest rates forced people to start saving and moving.

As the stock market and fund have been flat this year, sales of financial products have been blowout.

However, experts warn that due to the lack of mandatory guarantee for the expected yield of financial products, we must be vigilant against future damage to depositors.

In addition to increasing interest rates and promoting quasi faction, a new faction has emerged in the market, that is, the enterprise faction.

The school believes that the most important problem is not inflation but how to alleviate the problem of loans for SMEs.

Because if the central bank over tightens the chain of funds, it is easy to see a large number of bankruptcies of small and medium-sized enterprises and a large increase in laid-off workers.

The latter will affect the steady development of China's economy.

Hu Yu, deputy director of Warren Securities Research Center, believes that the key problem is that China's financial system needs to gradually realize the marketization of interest rates, reduce the borrowing costs of SMEs, and establish a fair and fair market mechanism and environment.

It is impossible to solve the deep-seated contradictions in the process of China's economic development through the simple and crude way of raising interest rates.

The rate hike will severely hurt local government financing platforms and individual housing loans. This is the most vulnerable part of the interest rate raising capacity, and it is the two largest sector that accounts for the largest share of loans in financial institutions.

"Once the cost of capital is raised, the local government will exert enormous pressure on the Finance (especially the central government), and for individual borrowers, it is difficult to pass on the increased interest cost or cause a bigger mortgage default."

How to make the best choice among the above variables and related factors is undoubtedly more difficult.

However, some experts remind that in the inflation situation, there is a basic principle and logical relationship, that is, "raising the cost of the basic currency, so that people who use it will pay the cost and thus reduce their use."