Central Bank: Directional Drop In Support To Support The Development Of The Real Economy, Releasing Long-Term Capital Of 550 Billion Yuan

The people's Bank of China announced on the 13 day that it would decide to implement universal finance in the next Monday, and the bank will achieve a targeted reduction of 0.5 to 1 percentage points to meet the assessment criteria. In addition, the eligible joint stock commercial banks will be further directed to 1 percentage points to support the issuance of loans in the inclusive financial sector. The above directional reduction has released a total of 550 billion yuan of long-term funds.

The central bank official said that the release of long-term funds will effectively increase the bank's support for the stable source of funds for the real economy, and it can also directly reduce the interest rate of the relevant banks by about 8 billion 500 million yuan per year. Through the transmission of banks, it will help to reduce the real interest rates of small and micro enterprises and private enterprises, and directly support the real economy. This directional reduction will take into account both active and ex post facto incentives. It will help to stimulate the vitality of market players and further play the decisive role of the market in the allocation of resources, and support the development of the real economy through market reform.

In the current situation, what is the signal released by the RR and what impact will it bring to the market? Tang Jianwei, chief researcher of the bank's financial research center, told Xinhua that the move has taken into account the support for enterprises to resume work and replenish liquidity at the end of the quarter. At the same time, it is expected that the rate reduction will precede the interest rate cut, and monetary policy will remain stable and flexible in the future. In addition, directional reduction is not equivalent to "flood irrigation", and monetary policy has not been separated from the sound track. Targeted reduction is only to cope with the impact of the epidemic. The financial support for the real economy's transmission structure is optimized to activate more financial resources and help to gradually restore capacity to normal levels.

Wen Bin, principal researcher of China Minsheng Bank, believes that China's monetary policy is mainly determined by factors such as domestic economic situation, inflation level and employment status. In the future, it will further release the potential of LPR reform and guide the real interest rate reduction of loans to reduce the financing cost of the real economy.