Central Bank: Monetary Policy Is Not Loose In The Second Half Of The Year

Just before the market loosened the monetary policy expectations in the second half of the year, the forum of the governor of the branch of the people's Bank of China may be able to convey the attitude of the central bank to the market. The meeting pointed out that domestic inflation expectations are still strong, and the basis for stabilizing prices is not strong enough. rebound The possibility. In the second half of this year, we must continue to implement a sound monetary policy and maintain the necessary policy strength.

The central bank pointed out that in the second half of the year, we should continue to deal with the three relations of maintaining stable and rapid economic development, adjusting the economic structure and managing inflation expectations in accordance with the central government's decision making arrangements, and persisting in stabilizing the overall price level. Macro-control The most important task is to continue to implement a sound monetary policy and maintain the necessary policy strength. At the same time, we should grasp the direction, intensity and rhythm of regulation, and further improve the pertinence, flexibility and regulation. Foresight 。

On the adoption of monetary policy tools, the conference said that the combination of interest rate, exchange rate, open market operation, deposit reserve ratio and macro Prudential management should be combined to maintain a reasonable scale and pace of social financing.

Sheng Hongqing, macro strategy analyst at Everbright Bank, said that inflation in the three quarter may be higher than that in the two quarter, or CPI or 6.2% in July. When inflation is still the primary task of macroeconomic regulation, the chances of using interest rate tools in the second half of this year are greater. Because in the current financial system, interest rates and other price instruments are more equal to the market financing entities, it is expected that -9 months in August will remain a sensitive window for controlling interest rate adjustment.

From the launch of credit, the central bank meeting said that financial institutions should be guided to continue to increase support for qualified SMEs, especially small and micro enterprises. We should further implement differentiated housing credit policies and urge financial institutions to grant loans to eligible housing projects in a timely manner so as to promote healthy and stable development of the real estate market.

It is worth noting that the meeting also said that the cross-border trade settlement of RMB should be extended to the whole country, and the pilot project of RMB financing for offshore projects should be steadily promoted, and the RMB settlement of foreign direct investment should be liberalized. Prior to this, the central bank has issued the "notice on issues related to cross-border RMB business". It said that the settlement of foreign direct investment (RMB FDI) is in the pilot stage of the case. In order to prevent hot money inflow, the RMB FDI pilot will not accept the national restricted category and key regulatory items.
 

　　 Central bank: stabilize the price base and maintain the necessary policy strength.
　　

With the central bank raising the reserve requirement to a record high level, many commercial banks have been crying out. A senior retail department of a joint-stock bank said that the wholesale loan system of the bank has been temporarily suspended by the head office this year.

However, the central bank's monetary policy has not been relaxed in all aspects. From July 31st to August 1st, the people's Bank of China branch president held a forum in Zhengzhou, Henan. At the meeting, it was emphasized again that "the foundation for stabilizing prices is not strong enough. Once the policy is loosened, there is a possibility of rebound" and "keep the necessary policy strength".

　　 Inflation pressure lingers on.

In June, China's CPI hit a 6.4% year high of three. Meanwhile, China's Manufacturing Purchasing Managers Index (PMI) fell for the fourth consecutive month in July and fell to a 29 month low. Many analysts and agencies expect that the price index in July will still be at a high level even though a slight decline will occur.

Sheng Hongqing, a macroeconomic analyst at Everbright Bank's capital department, thinks that the average inflation rate in the third quarter may be higher than that in the two quarter, and that it will be as high as 6.2% in July.

In the third week of July (July 18th to July 24th), the price of agricultural products of the Ministry of Commerce increased by 0.15%, rising again. Guotai Junan Securities believes that "food prices in July are forecast to increase by 0.7%, corresponding to food year-on-year 14.2%, CPI year-on-year 6.3%." {page_break}

The central bank said that in the second half of the year, in accordance with the central policy decision, we should continue to deal with the relationship between the three stable and fast economic development, adjust the economic structure and manage the inflation expectations. We must persist in stabilizing the overall price level as the primary task of macroeconomic regulation and control, and continue to implement a sound monetary policy and maintain the necessary policy strength.

　　 Diversification of regulatory means

"Mitigation will definitely slow down, whether it's initiative or passivity." Du Zhengzheng, a postdoctoral fellow at the Financial Research Institute of the Chinese Academy of Social Sciences, believes that although the central bank's monetary policy regulation will be relaxed in the first half of the year, the general direction will not change.

The people's Bank of China has increased interest rates three times this year and raised the deposit reserve ratio for the six time.

In a press release issued in August 1st, the central bank said, "grasp the direction, intensity and pace of regulation, and further enhance the pertinence, flexibility and foresight of regulation. We should integrate the tools of interest rate, exchange rate, open market operation, deposit reserve ratio and macro Prudential Management to maintain a reasonable scale and rhythm of social financing.

"From August 2011 to October, the funds for the open market are 352 billion, 239 billion and 298 billion respectively. Considering the tight market funds and the high probability of high inflation, we believe that the probability of raising the deposit rate in the short term is not great." Guotai Junan Securities believes.

Galaxy Securities Research Report believes that the CPI growth rate will slow down this month, the possibility of re opening interest rate tools in the near future is less likely.

There is another opinion on the expectation of regulation. Du Zhengzheng believes that even if CPI does not rise in July, the central bank may choose to raise interest rates or reserve instruments to deal with inflation.

Barclays Capital economist Chang Jian also believes that the central bank is expected to raise interest rates by 25 basis points in the three quarter. "This is more than catching up with higher real lending rates in the context of tight credit markets, and does not limit growth."

　　 exchange rate Or more trade-offs

Since the start of the foreign exchange reform last year, the central parity of RMB against the US dollar has appreciated by more than 5%. The central bank said it would "further improve the RMB exchange rate formation mechanism and give more play to the role of market supply and demand and Basket Currencies in the exchange rate adjustment."

Sheng Hongqing believes that in the second half of the year, the change of the RMB exchange rate may be based on the trade-off between import inflation and export decline. The RMB appreciation rate for the US dollar in 2011 was expected to be 5%. At the end of the year, the exchange rate of RMB against the US dollar may be 6.2. {page_break}

The central bank also said that it should continue to guide financial institutions to strengthen interest rate pricing mechanism, promote market-oriented interest rate reform, and further implement differentiated housing credit and loan policies in accordance with the requirements of the Central Committee regarding "unswervingly determined real estate regulation, unchanged direction and efforts not to relax".

　　 Central bank fears inflation rebound may hint that policy will not relax in the second half of the year.
　　

From July 31st to August 1st, the forum of the governor of the branch of the people's Bank of China (hereinafter referred to as the "conference") was held in Zhengzhou, Henan. The meeting revealed the central bank's policy concerns: "especially domestic inflation expectations are still strong, and the basis for stabilizing prices is not strong enough. Once the policy is loosened, there is a possibility of a rebound. "
　　

"We must persist in stabilizing the general price level as the primary task of macroeconomic regulation and control, continue to implement a sound monetary policy and maintain the necessary policy strength. "The meeting said. In the second half of the year, we should continue to handle the three relations of maintaining stable and rapid economic development, adjusting the economic structure and managing inflation expectations.
　　

The meeting said, "it is necessary to see that the fundamentals of China's economic development are good, and to maintain steady and rapid economic development has many favorable conditions and positive factors, so as to further enhance the confidence in doing economic work well, and to see that the imbalance, uncoordinated and unsustainable development in economic development is still outstanding. "
　　

Statistics Bureau data show that in the first half of 2011, the national GDP grew by 9.6% over the same period last year. But 6 and July economic indicators showed that economic growth has slowed down. On the one hand, CPI remains high; on the one hand, the slowdown in economic growth, the "stagflation" and "hard landing" argument began to prevail.
　　

PMI data released yesterday showed that official PMI fell slightly to 50.7% in July, better than expected. Previously, HSBC PMI fell below 50 to 49.3, but better than the previously announced preview value of 48.9..
　　

"PMI shows that the economy is about to bottom up. "The official PMI shows that domestic demand has improved in July, and the improvement of terminal demand has slowed down the pressure of inventory, and the stock index of raw materials and finished products has dropped to below 50, the rate of decline has been the highest and highest level in the same period of the year," Lu Zheng commissar, a senior economist at Xingye Bank, said.
　　

Lian Ping, chief economist of Bank of communications, believes that the Chinese economy will not have a hard landing. The fourth quarter economy will start to pick up steadily, and the economy will maintain more than 9% growth in the second half of this year.
　　

When it comes to monetary policy in the second half of the year, the meeting said that in accordance with the central policy decision, we should continue to deal with the three relations of maintaining stable and rapid economic development, adjusting the economic structure and managing inflation expectations. "Continue to implement a sound monetary policy and maintain the necessary policy strength. "
　　

At the beginning of July, the central bank monetary policy committee held a regular meeting in the second quarter of 2011. It is clear that the implementation of prudent monetary policy should pay attention to the stability, pertinence and flexibility of policies. At the time, concerns about the overshooting of monetary policy were beginning to strengthen.
　　

In 2011, the central bank's monetary policy tone changed from moderate easing to sound. At present, the central bank has raised the deposit reserve rate for 6 times in a row and has raised the benchmark rate of deposit and loan for the 3 time in a row.
　　

From the perspective of money supply, the monetary policy in the first half of the year has been effective: in the first 5 months of this year, the M2 data fell from 19.7% in December last year to 15.1% in May.
　　

Liu Xiao, a macroeconomic analyst at Zhonghui bank, pointed out that compared with the first quarter, the keynote of the central bank's meeting shows that it is more optimistic. It believes that China's current economic and financial operation is developing in a predetermined direction, and the main risk factor is inflation. {page_break}
　　

Zhu Jianfang, chief economist of CITIC Securities, believes that the long term import pressure of inflation will be reduced. The central bank will continue to implement a prudent monetary policy, but the policy focus will be stable from deflation.
　　

Statistics show that in the first half of the year, CPI climbed up to 6.4% in June, reaching a 36 month high of CPI. But due to the gradual release of the tail factor, the inflation situation in the second half of the year will be better than the first half.
　　

Guotai Junan research report predicts that in July, CPI was 6.3%, PPI was 7.3%, and the probability of high inflation was decreasing. Judging by the price trend before and after the whole year, it is estimated that the annual average value of CPI is 5.2% and the PPI annual average is 6.3%.
　　

China's macroeconomic and financial outlook for the second half of 2011, issued recently by the bank, pointed out that the current inflation expectations are too strong. The high inflation cycle is now in June, and the possibility of a slow fall in prices in the second half of the year is greater.
　　

The meeting said that we should integrate the tools of interest rate, exchange rate, open market operation, deposit reserve ratio and macro Prudential Management to maintain a reasonable scale and rhythm of social financing.
　　

Guo Tianyong, a professor at Central University of Finance and Economics School of finance, believes that the central bank's monetary policy tool will shift from quantitative tools to price instruments in the second half of the year. "In terms of economic structure, constrained by the size of funds, the use of quantitative tools will be bound to some extent. "
　　

"Initially, in 2012~2013, the average inflation is between 2.5%~4.5%. If there is no sudden impact on domestic and foreign markets, CPI will probably fall to about 3% in the middle of next year. According to the bank's research report, although the average inflation may be higher than in previous years, the risk of long-term inflation is not obvious. Inflation is generally controllable in the next two years.
　　

Lian Ping predicts that the accuracy rate of 1~2 will increase by 0.5 percentage points this year, and that the benchmark interest rate of the deposit and loan will not be adjusted again before the end of the year.

　　 Central bank: real estate regulation will not relax
　　

At the forum held by the governor of the branch of the people's Bank of China at the end of yesterday, the central bank set the tone for the second half of the year, saying that the overall level of stabilizing prices should be the primary task of financial macro-control and continue to adhere to a prudent monetary policy. The central bank said that the combination of interest rates, exchange rates, open market operations, deposit reserve ratio and macro Prudential management should be combined to maintain a reasonable scale and pace of social financing. At the same time, the real estate regulation and control will not relax, and further implement differentiated housing credit policy.
　　

Zhou Xiaochuan, vice governor of the people's Bank of China and vice president Hu Xiaolian attended the meeting. The information disclosed by the central bank yesterday revealed that China's economic development is now undergoing an orderly transformation from policy stimulus to independent growth, and continues to move towards the expected direction of macroeconomic regulation and control. But domestic inflation expectations are still strong, and the basis for stabilizing prices is not strong enough. Once the policy is loosened, there is a possibility of a rebound. In the second half of this year, the central bank will maintain the necessary policy strength, while further improving the pertinence, flexibility and foresight of regulation.
　　

In terms of real estate regulation, we should further implement the differentiated housing credit policy in accordance with the requirements of the Central Committee regarding "unswervingly determined real estate regulation, unchanging direction and unrelaxed efforts", and urge financial institutions to timely release loans to eligible housing projects.
　　

Faced with the pressing financing problems of many small and medium-sized enterprises in China, the central bank also promised to "further optimize the credit structure, and guide financial institutions to continue to increase support for qualified SMEs, especially small and micro enterprises".

The central bank set the tone for the second half of the year.

　
The central bank recently held a symposium of branch president that we should not only see that the fundamentals of our economic development are good, but also see that the unbalanced, uncoordinated and unsustainable contradictions in economic development are still outstanding. "Especially domestic inflation expectations are still strong, and the basis for stabilizing prices is not strong enough. Once the policy is loosened, there is a possibility of rebound". In view of the regulation in the second half of the year, "we must insist on stabilizing the general price level as the primary task of macroeconomic regulation and control, and continue to implement a sound monetary policy and maintain the necessary policy strength". The industry believes that in the medium to short term, the possibility of substantial turning of monetary policy is very small, which may continue to suppress the valuation of A shares.
 

　　 Central bank: stable prices, weak foundation

The forum held recently by the governor of the branch of the people's Bank of China has comprehensively analyzed the current economic and financial situation at home and abroad, and studied and deployed the key points for the second half of the year.

The meeting pointed out that in the second half of the year, we should continue to handle the relationship between the three stable and fast economic development, adjust the economic structure and manage the inflation expectations. We must persist in stabilizing the general price level as the primary task of macroeconomic regulation and control, and continue to implement a sound monetary policy and maintain the necessary policy strength. At the same time, we should grasp the direction, intensity and rhythm of regulation, and further improve the pertinence, flexibility and foresight of regulation.
 

In terms of specific policy choices, the conference calls for comprehensive use of interest rate, exchange rate, open market operations, deposit reserve ratio and macro Prudential management tools to maintain a reasonable scale and pace of social financing. We should further optimize the credit structure, and guide financial institutions to continue to increase support for qualified SMEs, especially small and micro enterprises.

What is worth noting is that the central bank emphasizes: "domestic inflation expectations are still strong, and the basis for stabilizing prices is not strong enough. Once the policy is loosened, there is a possibility of a rebound". {page_break}

　 Industry body: high interest rate will suppress A shares valuation

Zhang Xiaojun, chairman and general manager of Fairchild investment management company, headquartered in Tianjin, said in an interview with investment express: "we are cautious about the medium-term trend of the stock market". According to the analysis, the current economic environment does not support the shift of monetary policy: "from a macro level, the growth rate of GDP in the two quarter is not low; from a micro perspective, the performance of listed companies, represented by the listed companies, is still in the majority. But at the same time, inflation has high stickiness at high levels. In order to control inflation, the possibility of monetary policy turning is not big. Zhang Xiaojun believes that the continued high interest rate will suppress stock valuation (P / E). Historically, the low valuation is only one reason for the rise of the stock market. Therefore, although the valuation level of A shares is already low, it will not rule out a lower level. Judging from the current market climate, the low turnover and unpopularity of the stock show that the stock fund is not abundant. For investment opportunities, Zhang Xiaojun is more concerned about the performance of alcohol, medicine, photovoltaic and other areas to determine the value of the reasonable growth of varieties.
　　

Coincidentally, CICC's latest strategy report released on Monday said: "entering the August, the adverse factors of the market have gradually increased. From the perspective of operational strategy, it is suggested that investors should reduce their positions in August." According to the analysis, with the large banks' overstock rate falling to about 1%, there is not much redundant liquidity reserve in the market. If the CBRC strengthens the supervision of off balance sheet businesses such as bill financing and issuing financial products, it will further aggravate the tension of liquidity. Therefore, although the space to continue raising the deposit reserve ratio is minimal, the liquidity situation in August is still not optimistic. From the perspective of stock market funds, the rhythm of IPO in August will be significantly accelerated, especially when the IPO of main board will be re opened. In addition, in August, the maximum number of restricted shares in the year was up to about 330000000000 yuan, and the effect of "blood drawing" was obvious. CICC believes that if A shares are rebounded by the easing of the US debt crisis, it may be an opportunity for investors to cut short positions.

　　 Market forecast July CPI rose nearly June, August interest rate increase is expected to increase.

In July, the consumer price index (CPI) will be released in August 9th. According to the prediction results of more than 10 research institutes held by journalists, it is estimated that the CPI growth rate in July will be close to that in June. The difference is that the specific figures will fall slightly or rise to a new high in June. In view of the fact that CPI growth is still likely to be high in July, the market is expected to raise interest rates again in August.

　　 Forecast CPI growth in July is close to June.

A number of agencies judged that the CPI growth in July will only be 0.1 percentage points to 0.2 percentage points from June.

Guotai Junan Securities forecasts CPI growth of 6.3% in July compared with June. The report said: in the second week of July, the price of pork fell down. At the same time, the total price of food monitored by the Ministry of Commerce fell for the first time in nearly January. The price of producer goods continued to rise for two weeks, but overall, the pressure of rising prices was not great.

Beijing's leading international financial information company forecasts the same data as Guotai Junan. Dong Xianan, chief economist of Beijing leading international financial information company, told the economic reference daily that the price of edible agricultural products of the Ministry of Commerce showed that grain, oil, meat, poultry and aquatic products continued to rise year after year in the first 3 weeks of July, and vegetables dropped significantly compared with the same period last year. The weekly price ratio of wholesale price index of agricultural products released by the Ministry of agriculture in July was 0.7%, -0.2%, -1.1% and -0.9% respectively. According to the Ministry of Commerce and the Ministry of agriculture, the consumption of edible agricultural products in July was lower than that in June. It is estimated that CPI food items will increase by 14% in July, considering that CPI in July is near 6.3%.

Yuan Fu Securities said that the sharp rise in pork prices pushed the CPI to 6.4% in June. However, whether from the perspective of the tail factor or from the new price increase factor, CPI has peaked in June. In the first 2 weeks of July, although food prices, especially pork prices, had slowed down, the year-on-year growth rate was still low, with CPI expected to be 6.2% in July.

Guo Hai securities also believes that CPI will remain at a high level in July, with a year-on-year value ranging from 6.2% to 6.4%. Overall, the CPI of foodstuffs is expected to increase by 14% over the same period. Non food CPI will maintain the level of June. Huatai Securities expects CPI to rise 6.2% in July.

However, some institutions believe that the CPI growth in July will set a new year-on-year increase. If the chief economist of the Industrial Bank, Lu Zheng commissar, told the economic reference daily, CPI will continue to rush to about 6.5% in July after its new high in June, and the ring ratio will continue to be significantly higher than the normal level in history.

Soochow securities expects CPI growth in July to be between 6.5% and 6.7%. Analyst Huang Lin said the price situation in July was very serious. According to the data released by the Ministry of Commerce, pork and eggs rose narrower in June than in the first 3 weeks, but the increase of edible oil and poultry has been over June, and the decline of vegetables and fruits is also lower than that in June. In the context of new rising price factors, CPI food prices in July could be close to 15%. {page_break}

From the point of view of CPI's non food part, the price of producer goods has risen for two consecutive weeks, and CPI's non food price has been rising again or again. Secondly, the seasonality of July is very strong. From the past 5 years, the average monthly growth rate has reached 0.14%. Non food prices are expected to increase by nearly 0.2% in July.

　　 Judging the three quarter, the pressure of rising prices is still large.

Not only is the CPI rally in July still strong, experts predict that the pressure will rise in the three quarter. Ba Sheng song, deputy director of the Financial Research Institute of the State Council Development Research Center, said that CPI rose 6.4% in June, mainly driven by rising food prices led by pork. In July, even if the price of international commodity prices could offset some of the price increase factors, the tail factor also dropped. CPI was probably only slightly down compared with June, and is still expected to be over 6%. Price rises may still be higher in the three quarter, up more than 5% over the same period.

Zhou Jingtong, senior economist of the Strategic Development Department of the head office of the Bank of China, also judged that inflation pressures remained relatively high in the three quarter. He told the economic reference Daily: on the surface, prices are still structural increases this year, mainly caused by rising prices of food and housing. But in fact, China's prices are changing from structural rise to overall rise. Since the beginning of this year, prices of four categories of consumer goods, such as tobacco and alcohol products, household appliances and services, medical and health care and personal goods, transportation and communications, have all been positive, and the characteristics of the overall rise in prices are more and more obvious.

Zhou Jingtong believes that the three quarter of the main factors affecting price increases include: first, food prices will remain at a high level. Affected by frequent natural disasters and speculation, the prices of rice, vegetables, aquatic products and Chinese herbal medicines will hardly drop in the short term. At the same time, the proportion of pork in China's consumption basket is as high as 9%. The impact of rising pork prices on CPI in recent and future periods can not be ignored. Internationally, according to the latest report of the UN Food and Agriculture Organization, global food prices are expected to remain at a high level in the second half of 2011 to 2012, due to the decline in global grain stocks, the increase in aggregate demand and the limited increase in total crop yields.

Two, in the medium to long term, labour intensive products will face long-term upward pressure due to the impact of Lewis turning point and rising labor costs. Three, the overall surplus of liquidity will not change. Monetary conditions and foundations for price rise will still exist. Four, PPI is growing faster, and the downward pressure on the downstream is still huge. The transmission process will continue.

Yao Jingyuan, chief economist of the National Bureau of statistics, told the economic reference daily that price rise is still a big problem for China's economy this year.
He said that the reasons for the current price rise are more complicated. From an international perspective, after the outbreak of the world financial crisis in 2008, the main way to deal with the issue was to issue more banknotes, which resulted in a worldwide excess of liquidity and the rapid rise of international commodity prices. China is now the second largest importer in the world, so most of the time it can only accept the price rise passively.

From the domestic perspective, the currency is also excessive. This is the cost that we have to overcome in order to overcome the crisis. But the deeper problem is the weak agricultural foundation in China. At present, China's agricultural population contains about half of the country's population, but agricultural output accounts for less than 10% of GDP.

Yao Jingyuan believes that this year's price control goals "difficult, can be achieved." It is difficult to say that on the one hand, China can only passively accept imported inflation. On the other hand, China's weak agricultural foundation can be improved in one or two days.

But the favorable conditions are also two aspects: first, China's grain output exceeds 1 trillion Jin in 4 consecutive years, the current stockpile reserves reach 30%, which is far higher than the 18% international average level; two, the pattern that the domestic market overall slightly exceeds the demand has not changed, especially in the industrial consumer goods market. {page_break}

　 It is expected that interest rates will be raised again in August.

With a number of agencies predicting that CPI growth in July is still likely to remain high, the market is expected to continue to raise interest rates in August.

In particular, Xia Bin, director of the monetary policy committee of the people's Bank of China and director of the Finance Research Institute of the State Council Development Research Center, recently publicly supported China's interest rate on deposits and openly bid farewell to negative interest rates.
 

Recently, many economists interviewed by reporters also hold similar views. For example, Ba Shu Song told the economic reference daily that if the CPI in the three quarter increased by more than 5% in the past 3 months, there should be one or two increase in interest rates. On the one hand, the price increase is still at a high level. The interest rate increase is conducive to curbing inflation expectations. At the same time, as the real interest rate level of the market has increased significantly, interest rate increase is only a correction of negative interest rates, and the policy action to narrow the gap between the market and the financing interest rate has been limited to the real economy.

He Keng, deputy director of the finance and Economic Commission of the National People's Congress, also believes that "monetary policy should be more cost effective and less quantitative." He told the economic reference daily that there is no consensus on the causes of inflation in China at present. The mainstream view is that inflation is a monetary phenomenon, but it is not clear what excess liquidity is, and how much is not surplus. The fundamental reason for the rising prices is the cost push. Therefore, the corresponding regulation and control policy should be flexible monetary policy and stable financial policy.

Lu commissar also said: "taking into account the current anti inflation is still the first task, and the current price situation also means that the annual CPI control within 5% of the task will be quite arduous, so we expect to continue to raise interest rates in August, but the statutory reserve requirement rate will not be raised. Raising interest rates will have some restraining effects on factors such as rising prices of raw materials, excessive labor costs and recruitment difficulties, and more importantly, raising interest rates in general will help curb the strong speculative atmosphere of assets and help enterprises return to their main businesses. At the same time, increasing interest rates to reduce excessive use of limited credit resources by large enterprises is conducive to the realization of more valuable credit resources allocated to SMEs.

In addition, Li Daokui, chairman of the monetary policy committee of the people's Bank of China and director of the China and world economic research center of Tsinghua University, said recently that micro-blog's most urgent need is to reduce the negative interest rate of deposits and prevent the two round of inflation caused by high CPI consumption or investment.
 

The latest report released by the National Information Center says that negative interest rates will not only stimulate the increase in current consumption, but weaken the residents' consumption ability in the future. The impact of higher food prices on other consumption has gradually emerged. Industrial goods, service prices and resource prices rose overall, resulting in a sharp decline in the real consumption capacity of residents, dampened consumer confidence, personal consumption behavior tends to be cautious. It is suggested that the central bank should increase interest rates by 1 percentage points to 2 percentage points to ensure residents' wealth preservation and appreciation.