China's Foreign Reserves Rises To US$3.23 Trillion In Feb
China's PMI Readings Suggest Industrial Production Growth Remained Steady -- Market Talk
China Central Bank Keeps Key Policy Rate Steady
The central bank continues to net withdraw, tightening the liquidity, with the issuance volume and price of interbank certificates of deposit both rising, and the market expects the window for interest rate cuts and reserve requirement ratio reductions ma
① After the Spring Festival, the outflow of corporate deposits, the shift of non-bank deposits to wealth management, and other factors have led to significant pressure on the Banks' liabilities. In response, Banks have increased the issuance of interbank certificates of deposit to fill the funding gap on the liability side, resulting in an inverted yield on interbank certificates of deposit at maturity. ② The central bank's net absorption operations reflect concerns about "preventing fund circularity", "long-term yields", and "firmly preventing risks of over-adjustment in Exchange Rates". The market anticipates that a window for interest rate cuts and reserve requirement ratio reductions may open around the end of the first quarter.
After the decrease in existing mortgage rates, some Banks have also lowered the interest rates on existing Consumer loans? Here comes the truth: it's a pricing contract with floating interest rates.
① Why are Banks taking the initiative to lower the interest rates on existing consumer loans? Financial report sources confirmed that the main reason lies in the fact that relevant Banks previously adopted floating interest rate pricing contracts for consumer loan products similar to those for mortgage products. ② Therefore, similar situations of lowering existing interest rates are not common in the market. A more common situation is that as the LPR continues to decrease, Banks' consumer loan interest rates keep hitting new lows.
Inclusion of medium and short-term government bonds and differentiated reserve requirement ratios? The market is discussing the possibility of reforming the central bank's deposit reserve ratio.
The market expects that in the future, differentiated reserve requirements may guide the optimization of Crediting structure, incorporating mid- and short-term government bonds into deposit reserves. Media controlled by the central bank stated that the toolkit for monetary policy has been continuously evolving, requiring dynamic observation of the central bank's monetary policy tools. In different scenarios, the central bank will have different tools to respond, and may even innovate and implement some new tools.