Lowering Interest Rates Is Expected To Heat Up Again. Monetary Policy Is Coming Again.

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Xiaobian of the network to introduce the reduction of quasi interest rate disputes again, monetary policy is coming to the "rush hour".

The poor macro and micro economic data in August led to a further increase in the overall interest rate cut. Monetary policy is facing another "rush hour".

Some agencies predict that the possibility of a full reduction in interest rates will be increased. However, there are also insiders who believe that monetary policy may "remain calm and wait for the coming year". The policy will continue to focus on structural adjustment. The central bank may restart the reverse repurchase, and it will re orientate and reduce interest rates.

Full relaxation, voice resurgence

In August, the economic and financial data were not optimistic.

Since last weekend, the market is expected to resume interest rate cuts.

This is expected to continue fermenting on the 15 th. It is reported that the central bank invited many experts to participate in the meeting on monetary policy proposals on the 16 th, so as to prepare public opinion for the next step whether monetary policy is going to be fully relaxed.

However, according to the China Securities Journal reporter, the 16 meeting of the central bank was an expert consultation meeting organized by the Secretariat of the monetary policy committee.

CIC Peng Wensheng and others released the August economic data review report that the three quarter GDP growth is expected to slow to 7.3%.

Due to the weaker domestic demand kinetic energy ratio, plus the higher base last year, GDP growth in the fourth quarter still faces greater downward pressure.

Policy is balanced and steady growth and structural adjustment is more difficult.

The economic slowdown has increased the pressure of policy easing. In addition to directional easing, the possibility of a comprehensive reduction or reduction of interest rates has been further improved.

A number of overseas investment banks are expected to reduce interest rates and increase interest rates.

Royal Bank of Scotland and Barclays Bank both cut China's GDP growth to 7.2% this year.

Royal Bank of Scotland says weak economic activity indicators indicate that China's economy is declining again, and that the real estate market downturn and weak corporate investment are the main drag factors.

The current economic performance will put pressure on the Chinese government to take greater efforts.

Barclays Bank said it expects to cut interest rates two times in the four quarter to the first quarter of next year.

Comprehensive relaxation is hard to make.

Behind the expected drop in the overall interest rate cut is the current "monetary policy" again facing "rush hour".

CPI continued to slump and industrial value added dropped sharply. According to past experience, the possibility of lowering interest rates is indeed there.

However, the central bank has always stressed that policies should be fixed, and the principle of total stability and structural optimization should be adhered to, so that the market can not accurately "pulse".

The report released by CIC's Fixed Income Research Group believes that September will be the most full month for the market and the central bank.

This year, the relevant departments have been emphasizing the micro stimulus rather than the overall stimulus, mainly considering that the comprehensive stimulus is not conducive to the adjustment of the economic structure, nor is it conducive to reducing the leverage of enterprises and local governments.

In August, both financial and economic data showed poor performance. If the departments concerned still insist on giving priority to micro stimulation and directional stimulation and do not undertake comprehensive relaxation, the possibility of complete relaxation in the remaining months of the year will be negligible.

The report believes that since July, the central bank's initiative to launch the underlying currencies through various tools is marginally diminishing, while in the 2-6 month it is increasing marginally. This also reflects the central bank's desire and orientation to relax substantially.

The report of the strategic planning department of the Agricultural Bank believes that monetary policy will "remain calm and wait for the coming year".

The reasons given by the ABC report are as follows: first, employment is good.

Two, the poor performance of economic data in August was a negative result of last year's stimulus policy.

An important reason for the low industrial added value in August was that the base was higher in August last year.

Three, it is a psychological cushion for accepting the goal of reducing economic growth next year.

The report issued by the macro team of Minsheng Securities Research Institute believes that the full range of interest rate cuts will not occur within the year, and the directional regulation of "steady growth, reform and structural adjustment" is still the main keynote.

Reverse repurchase may be renewed

For the future use of specific monetary policy tools, the report issued by the Ministry of strategic planning of the Agricultural Bank believes that first, there is concern about the full reduction of interest rates.

At present, the call for a full rate cut is relatively large, but the overall interest rate cut is contrary to the market-oriented interest rate reform: the central bank has abolished the reserve fund.

In the strict sense, in the strict sense, the central bank should gradually weaken the influence of the benchmark interest rate of loans, and more often guide the interest rate trend through other ways of marketization, such as reverse repurchase, which is also what the central bank has been doing this year and has some effect.

If the central bank announces the lowering of the benchmark lending rate, it will further strengthen the role of the central bank's benchmark interest rate in bank interest rate pricing, which is not conducive to the loan base interest rate that the central bank has been trying to cultivate.

In addition, the Fed may raise interest rates next year. If China cuts interest rates, it may trigger capital flight.

Second, the overall reduction effect is not large.

Taking into account the net decrease in foreign exchange holdings of financial institutions in August, the overall reduction is also expected.

But at present, under the guidance of the central bank, the market liquidity is generally well, the market interest rate is significantly lower than the beginning of the year, even though it will further lower the interest rate in the inter-bank market, but it has little impact on the real economy.

Third, there is limited space for directional relaxation.

Data in August showed that the effect of targeted easing was not obvious.

Fourth, the exchange rate may be slightly derogated.

In recent years, the spot exchange rate of RMB against the US dollar has continued to rise, and the middle price has maintained a two-way fluctuation pattern. The exchange rate is expected to be stable and slightly derogatory, so as to continue to create conditions for stabilizing external demand.

In fact, under the current circumstances, it is necessary to stabilize the exchange rate and stabilize external demand.

Fifth, government investment will be appropriately increased.

Despite the slowdown in the current fiscal revenue growth, the new budget law has proposed the gradual establishment of the inter annual budget requirements, leaving room for the provincial government to issue bonds, and the government's investment in infrastructure and public services should continue to accelerate.

CICC fixed

According to the report released by the research team, it is possible that the central bank can restart the reverse repo and appropriately reduce the reverse repo rate to respond to the macro data.

It not only avoids the image of iron plate, but also does not cause excessive stimulation or contrary to the adverse consequences of micro stimulation.

The possibility of re orientation is also possible.