China'S February Deposit Rate Or "Forced Landing"

The figures released recently by the people's Bank of China show that: at the end of 2, foreign exchange accounted for 25 trillion and 520 billion yuan, which increased by 25 billion 115 million yuan in the month, less than 18% of the new quota in January.

Since last October, foreign exchange holdings have seen negative growth for 3 consecutive months, and the rate of decline has gradually expanded.

In January this year, there was a rebound in the bottom, with an increase of 140 billion 940 million yuan, but the current rebound has narrowed sharply again.

Analysts generally believe that the reduction of deposit rate will be the central bank's choice.

Foreign exchange accounts for a year or less trillion

Li Huiyong, chief macroeconomic analyst at Shenyin Wanguo, pointed out in an interview that the trend of cross-border capital outflow from emerging market countries is still continuing. The two is due to the huge trade deficit in February, which has narrowed the growth of foreign exchange holdings.

"Recently, the emerging market currencies depreciated against the US dollar at the end of last year, showing an appreciation at the beginning of this year, but since February, it has seen a downward trend.

Because the exchange rate reflects the price of the currency, so at the moment when the devaluation atmosphere is getting heavier, the funds must be flowing out of the emerging market countries.

Li Huiyong said.

According to customs data, China's trade deficit in February was US $31 billion 490 million, the highest monthly deficit in the past 10 years.

At the same time, according to the Ministry of Commerce's announcement, China's actual use of foreign capital in February was 7 billion 726 million US dollars, down 0.9% compared to the same period last year, and 0.3%, 12.73% and 9.76% year-on-year since November last year.

Therefore, the trade deficit and the decrease in the amount of FDI account for the decrease in foreign exchange earnings from current account and capital account.

Li Huiyong estimated that foreign exchange accounted for about 1 trillion and 800 billion growth in the whole year, 1 trillion less than last year.

"This year's foreign exchange situation depends mainly on overseas funds for China's economic growth, investment returns and interest rate prospects."

Li Huiyong said, "this year, as the economic slowdown is expected to increase, there is uncertainty in the growth. If investment returns, real estate and asset prices are full of uncertainties, capital inflows will be less."

The State Administration of foreign exchange has also written before pointing out that due to the unprecedented complexity and grim international economic and financial environment, all kinds of long-term, structural and unexpected problems are intertwined. The global financial market will continue to be turbulent repeatedly, which may inhibit external demand and arbitrage capital flows. In the next few years, the scale of China's cross-border capital inflow will decrease and fluctuate.

This also shows that, with the trend of cross-border capital flows becoming more and more obvious, foreign exchange will change the pattern of steady growth in the past, and monthly fluctuations will increase.

Hedge ratio is inevitable.

For a long time,

Zhou Xiaochuan, governor of the central bank, said during the two sessions of the National People's Congress that the use of the deposit reserve ratio tool depends on the liquidity situation, which is related to the foreign exchange occupation and is related to the balance of payments.

Therefore, the industry expects that under the current level of foreign exchange reserves, the deposit reserve ratio tool will be flexibly reduced according to the liquidity condition.

"One of the factors that need special attention is the impact of observation on capital flows, because now economic globalization, we must pay special attention to the impact of capital flows."

Zhou Xiaochuan said.

Peng Wensheng, chief economist at CICC, pointed out that in February, when the trade deficit exceeded the expected expansion, if the short-term capital in February was still a net outflow, then the low foreign exchange position in February would bring pressure to the broad liquidity supply in the country, or deposit again or again.

Since February 24, 2012, the central bank has cut the deposit reserve ratio of deposit financial institutions by 0.5 percentage points, which is estimated to release liquidity of 400 billion yuan, which is widely interpreted by the industry as a policy hedge in response to the decline in foreign exchange holdings in the 4 quarter of last year.

"The central bank is bound to hedge by reducing the deposit rate. It is expected that the deposit rate will be lowered three times in the three quarter of this year."

Li Huiyong told reporters.