After 13 Days, Welcome To "Reduce Interest"! What Does It Mean?

In November 5th, the central bank lowered its lending interest rate of 1 years by 0.5 basis points.

In November 18th, The central bank restarted the reverse repo operation and reduced the underlying repo rate by 5 basis points.

After 13 days, the central bank will cut interest rates again. What signals do you release?

Central bank lowered Seven Day reverse repo rate to 2.5%

In November 18th, the central bank issued a notice that the 7 day reverse repurchase rate of 180 billion yuan was achieved on the same day, and the winning rate was 2.50%, which was 5bp lower than before. This is the first time the 7 day reverse repo rate has been lowered for the first time in more than four years.

However, the reverse repo rate was also expected. At the beginning of November, when the central bank lowered its 1 year interim lending convenience (MLF) interest rate by 5 basis points, there was an analysis that the reverse repo rate would also drop the same number.

After this good news announcement, the interbank spot bond yield descends 4-5 basis points. The Shanghai Composite Index closed up 0.62%, recovering 2900 points.

What is? Reverse repurchase operation ?

The so-called reverse repurchase operation refers to a way of releasing liquidity of the central bank in the open market, popularly speaking, that is, commercial banks pledge the bonds to the central bank, while the central bank borrows money to commercial banks.

Therefore, if the central bank lowers the interest rate of the reverse repurchase, it means that Reduced the financing cost of commercial banks in the open market.

Nine Since the month The central bank has cut three interest rates continuously.

From the end of September, the interest rate of the loan market was lowered, and the interest rate of the medium-term loan was lowered by the beginning of this month. Until yesterday, the central bank lowered the reverse repo rate of the open market operation. What does the central bank continuously cut three interest rates mean?

The last time the central bank carried out the reverse repurchase operation was October 25th Since then, the central bank has suspended funds through reverse repurchase.

After the Federal Reserve cut interest rates in October 31st, the central bank did not synchronize its actions in the open market.

But then in November 5th, the central bank lowered its 1 year period. Medium term lending interest rate 0.5 basis points After lowering the reverse repo rate this time, the 7 day reverse repo rate returned to the level of last March.

Earlier in September 20th, the lending market quoted interest rates also dropped by 5 basis points. These actions are known by the outside world as " Rate cut "

The central bank's recent series of monetary policy practices have enabled the market to increase the intensity of counter cyclical regulation. Market expectations The latest lending market interest rate this week has increased again.

Monetary policy refined release loose signal

What does the central bank continuously cut the three interest rate mean? What kind of waves can it bring to the capital market?

Guan Qingyou, Dean of the Financial Research Institute:

It should be said that now the central bank believes that the status of steady growth has been enhanced, and that the intensity of countercyclical regulation has increased.

Through reverse repurchase operations, the central bank can effectively replenish market liquidity and reduce the reverse repo operating interest rate, which can guide short-term capital interest rate downwards, thereby reducing the cost of liabilities of financial institutions, and achieving the goal of reducing the financing cost of the real economy.

The reverse repo rate downward is positive for the capital market, and the stock market has been affected. The bond market, the bond market which has been restrained by inflation has risen, and the loose space of monetary policy has been opened. However, we should pay attention to the central bank's efforts to prevent flood irrigation. The central bank's monetary operation is very meticulous.