China Will Continue To Implement Prudent Monetary Policy.

The central bank issued the first quarter monetary policy report. The report on "enhancing the pertinence and effectiveness" of monetary policy is a key word not mentioned in previous reports, which has strong signal significance for future monetary policy.

In the last quarter's monetary policy report, the central bank said, "from the price situation, price increases are relatively low, relatively stable, and continue to exhibit structural characteristics."

Less expressed, no worries about price performance at all.

Rising prices

The central bank's monetary policy in the first quarter continued to be sound.

We should maintain flexibility and moderation, adjust the fine-tuning in a timely manner, enhance pertinence and effectiveness, and do well in the total demand management suited to the structural reform of supply side.

Phoenix Financial News found that compared with the fourth quarter of last year's monetary policy report, "enhancing pertinence and effectiveness" is a new word in this monetary policy report.

The reason for this wording is also reflected in the central bank's report "China's economic outlook".

The central bank said that from the price situation, price increases have increased and future changes must be concerned.

Prices rose somewhat in the first quarter, and they were more concerned.

Judging from the current internal and external environment, the global economy is generally weak, and the rebalancing adjustment will take a long time. The process of domestic economic restructuring is not over yet.

The foundation is not stable, the downward pressure still exists, and the recent growth rate of money * has been stabilized at a high level. The pig grain ratio is at a historical high. There is a possibility that there will be a downtrend in the future. If these trends can continue, it will help keep prices basically stable.

China's CPI grew by 2.3% in March, a 20 month high.

Among them, the pork prices that the market is more concerned about has risen 28.4%, pushing up CPI by about 0.64 percentage points, and the price of fresh vegetables increased by 35.8% over the same period last year, pushing CPI up by 0.92 percentage points.

The upcoming April CPI rose by 2.4%.

For this reason, many analysts have suggested that prices will rise too fast and stagflation will be possible.

In April 29th, the Political Bureau convened a meeting. The meeting stressed that "macroeconomic policy should be targeted", referring to price issues. We should pay attention to price changes, ensure effective supply, and actively and steadily push forward the price reform.

The Politburo meeting is concerned about the price problem, which is rather rare. Many analysts emphasized this signal.

In the context of the current downward pressure on the economy, the market is still debating whether the future interest rate cut will happen.

The reason for the reduction of interest rates is that the economic recovery is not stable, or even further down. It is necessary to reduce interest rates to stabilize the economy. The reason for not lowering interest rates is the recent price trend, and the central bank's frequent open market operations in the short and medium term.

In addition, the sharp rise in credit in the first quarter also attracted the attention of the market.

Central bank data show that 2 yuan loans increased by 4 trillion and 610 billion yuan in the first quarter, and RMB loans to the real economy increased by 4 trillion and 670 billion yuan, a record high.

The scale of social financing increased by 6 trillion and 590 billion yuan, also a record high.

Ma Jun, chief economist of the central bank's Research Bureau, explained that the main consideration of monetary policy is to provide the monetary conditions needed for steady growth.

In addition to continuing to support the goal of steady growth, the future monetary policy operation should also take precautions against macro risks. In particular, we should avoid the excessive increase in the leverage ratio of enterprises, and take into account the impact of the growth of money and credit on future price movements and real estate prices.

Yesterday, the policy report of Beijing on the coming policy released by the NDRC revealed that in terms of monetary policy, the NDRC held that:

First, we should appropriately increase the supply of funds, keep the broad money supply M2 growth at around 13%, reduce the deposit reserve ratio by 1 percentage points, adjust the management parameters of the agreed loan scale, increase the available positions of commercial banks, and stabilize bank credit lines in the average level in recent six months.

Two, we should increase the frequency of open market operations, increase short-term market liquidity, and guide short-term interest rates to remain at a low level.

Flexible use of convenient operations such as standing lending, mortgage supplementary loans and short term liquidity adjustment tools (SLO) can improve the timely and effective loan availability of enterprises, and reduce the financing cost of enterprises.

The three is to revitalize credit capital stock.

Through various directional control measures such as refinancing and directional reduction, we should further expand the scope of credit asset securitization pilot, and provide financial support for small and micro enterprises.

On the basis of adjusting and optimizing the credit structure, we will improve the efficiency of credit.