How Will The Third Drop In The Central Bank'S Impact On The Textile Industry During The Year?

One, news description

The following is the official announcement issued by the central bank:

In order to further support the development of the real economy, optimize the liquidity structure of commercial banks and financial markets, reduce financing costs, and guide financial institutions to continue to increase their support for small and micro enterprises, private enterprises and innovative enterprises, the people's Bank of China decided that from October 15, 2018, the RMB deposit reserve ratio of large commercial banks, joint-stock commercial banks, urban commercial banks, non County commercial banks and foreign-funded banks should be reduced by 1 percentage points, and the medium-term credit facility (MLF) that expires on that day will no longer be renewed.

The people's Bank of China will continue to implement a prudent and neutral monetary policy, do not carry out flood irrigation, pay attention to directional regulation and control, maintain a reasonable and abundant liquidity, and guide the reasonable growth of monetary credit and social financing scale, so as to create an appropriate financial environment for high quality development and supply side structural reform.

Two, the purpose of lowering accuracy.

This is the third rate cut since 2018. In April 2018 and June, the central bank lowered the reserve requirement by 100 and 50 basis points respectively. The central bank once again dropped 100 basis points.

Since the beginning of this year, the legal reserve requirement ratio has been reduced by 250 basis points.

After this reduction, the reserve ratio of large and medium-sized deposit financial institutions was 14.5% and 12.5% respectively.

About 1 trillion and 200 billion yuan will be released, which will be used to repay the MLF4500 billion due in October 15th. In addition, it will release 750 billion yuan of funds.

According to the official statement of the central bank, the purpose of this reduction is to support the development of the real economy by reducing the financing cost of SMEs, and the two is to optimize the liquidity structure of commercial banks and financial institutions.

Three, lowering the background

The macro background of this reduction is the further slowdown in the growth of the real economy.

Without accident, the growth rate of China's GDP will drop to 6.6% in the third quarter of 2018, while the fourth quarter may fall further to 6.4%.

The deepening will further weaken the contribution of the import and export sector to economic growth.

Once the export growth rate has dropped due to the impact of trade friction, this will affect the growth rate of manufacturing investment.

The tightening of real estate regulation will lead to a gradual decline in real estate investment growth.

At present, the central government encourages local governments to issue special debt and encourage commercial banks to buy special debt, which can only lead to a moderate rebound in infrastructure investment growth.

The financial background of this reduction is that the financing difficulty of SMEs is still relatively large.

Although one of the purposes of the central bank's two targeted reduction is to promote SME financing.

However, in the process of tighter financial supervision environment and massive return of bank assets, commercial banks tend to reduce their credit support to SMEs.

In the past few months, the growth rate of total social financing is far below the growth rate of RMB loans and M1 growth is slower than the growth rate of M2.

To effectively reduce the financing difficulties of SMEs, on the one hand, it is necessary for the central bank to maintain a reasonable and sufficient supply of liquidity. On the other hand, regulators need to support SMEs' financing in regulatory policies, and also need to maintain the active equity market.

If there is a lack of coordination between the latter two, it is difficult to achieve this goal only by reducing the central bank's accuracy.

Four. What's the impact on the textile industry?

1., it will help solve the financial problems involved in cotton and textile enterprises, and credit support will be increased.

2., with the focus of the central bank, government funds and the government turning to tens of thousands of small and micro enterprises, especially to accelerate the "debt to equity swap", the tight cash flow pressure on cotton enterprises is expected to be effectively alleviated.

(1) first, help 2018/19 seed cotton purchase and processing, to protect farmers' income;

(2) Secondly, cotton traders.

Capital is replenished, which is conducive to the stability of cotton prices and the medium and long-term development of the market. The textile enterprises appropriately increase the storage of cotton and other materials to avoid the risk of huge fluctuations such as Zheng cotton and ICE; and (3) once again, it is conducive to the sale of cotton in 2017/18 and quickening the withdrawal of funds.

3. stimulating domestic consumption of cotton and textiles and clothing is a positive fact for the whole industry.

4. liquidity is appropriate and loose, and it will be good for people to invest or borrow money. At least, the cost of borrowing will not rise further. Even in the future, there may still be a decline. Therefore, in the case of stable financing costs and market confidence recovery, domestic consumption and investment are expected to get out of the trough. The production and sales of small and micro enterprises such as cotton, textile, clothing and so on will fully recover and even enter the "fast lane".

5. the government's determination to implement a prudent monetary policy for cotton,

Eating "reassurance" 6. the pressure of economic growth in the second half of this year, capital constraints and the risk of financing slowdown in the background of financial regulation are becoming more and more obvious. It is an inevitable option to achieve precise regulation and reduce leverage to small and micro enterprises.

From the perspective of monetary policy, liquidity is continuously lowered and the confidence of SMEs, such as cotton, textiles and clothing, has been restored.

Five, the forecast for the future market

First, the central bank released trillions of funds, the real economy has been greatly supported, especially the problem of capital flow of small and medium-sized manufacturing enterprises has been alleviated; secondly, the textile mill has been replenishment, which is conducive to stable and long-term development, and evaded the risk of skyrocketing and plunging of PTA futures.

Second, two times this year, the export tax rebate rate has been raised.

The increase in tax rebate rate is concentrated in 1%-3%, and further simplifies the tax system and speeds up the tax rebate progress from 13 working days to 10 working days.

On the one hand, it has increased the profits of enterprises and alleviated the pressure of capital turnover on the other hand.

Third, the Ministry of environmental protection has eased the winter pollution control measures.

For most chemical enterprises, it is no longer a one size fits all cut down and reduction in production. Only those factories that are seriously polluted will be inspected.

Fourth, since November, China has reduced the MFN rate of 1585 tax items, including imported textile machinery, so that more enterprises can import high-quality machinery and equipment, thus producing quality products and reducing the difficulty of technological upgrading of enterprises.

With so many favorable policies, the textile industry is no longer difficult this winter.

(article pictures are all sourced from the Internet)