Monetary policy effectively supports economic recovery
2024-08-19
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
Our reporter Wu Qiuyu
The People's Bank of China recently released the China Monetary Policy Implementation Report for the Second Quarter of 2024 (hereinafter referred to as the "Report"), summarizing the implementation of monetary policy in the first half of the year and providing an outlook for monetary policy in the second half of the year.
The report shows that since the beginning of this year, monetary policy has provided financial support for the continued recovery of the economy. The total amount of finance has grown reasonably. At the end of June, the stock of social financing scale and broad money (M2) increased by 8.1% and 6.2% year-on-year respectively, and new loans in the first half of the year were 13.3 trillion yuan. The credit structure continued to optimize. At the end of June, inclusive small and micro loans and medium- and long-term loans in the manufacturing industry increased by 16.5% and 18.1% year-on-year respectively, both exceeding the growth rate of all loans. The financing cost has been stable and declining. The weighted average interest rate of newly issued corporate loans in June was 3.63%, 0.32 percentage points lower than the same period last year. The RMB has been stable and rising against a basket of currencies. At the end of June, the RMB exchange rate index of the China Foreign Exchange Trading Center (CFETS) rose by 2.7% from the end of last year.
"This year's monetary policy was launched early and with sufficient force, which strongly supported the good start of the economy." Wen Bin, chief economist of China Minsheng Bank, said that since the beginning of this year, the People's Bank of China has comprehensively used tools such as reserve requirement ratio cuts, open market operations, medium-term lending facilities, re-loans and re-discounts, added temporary positive and reverse repurchase operations, lowered the re-loan and re-discount rates for supporting agriculture and small businesses by 0.25 percentage points, lowered the reserve requirement ratio by 0.5 percentage points, and released more than 1 trillion yuan of medium- and long-term liquidity. At the same time, it promotes balanced credit supply, revitalizes inefficient existing financial resources, regulates idle capital and manual interest payments, and improves the quality and efficiency of serving the real economy.
On May 17, the People's Bank of China launched a policy package for the real estate market, reducing the minimum down payment ratio for personal housing loans, canceling the lower limit of personal housing loan interest rates, and lowering the interest rate of provident fund loans, reducing the cost of housing purchases for residents and releasing rigid and improvement housing demand. At the same time, a 300 billion yuan re-loan for affordable housing was established to support the destocking of the real estate industry. The policy strength was unprecedented and effectively mitigated the risks in the real estate market. In the first half of the year, the year-on-year declines in the sales area and sales of newly built commercial housing in the country narrowed by 1.3 and 2.9 percentage points respectively compared with January-May, and the foundation for the economic recovery was further consolidated.
The report believes that in the first half of the year, the complexity, severity and uncertainty of the external environment increased, bringing more adverse effects; insufficient domestic effective demand, and the continued deepening of the transformation of new and old drivers and structural adjustments also posed certain challenges. At the same time, it should be noted that the effects of previous policies continue to emerge, and positive factors are also gathering and increasing. my country's economy is operating steadily and its long-term positive development trend will not change, and we must strengthen our confidence in development.
The "Decision" of the Third Plenary Session of the 20th CPC Central Committee proposed to accelerate the improvement of the central bank system and smooth the monetary policy transmission mechanism.
"Since late July, the People's Bank of China has carried out a series of monetary policy operations, which have incorporated reform into regulation. This is not only a short-term macro-control, but also a reflection of the medium- and long-term financial reform ideas." Dong Ximiao, chief researcher of CCB, believes that recently, in accordance with the requirements of unblocking the monetary policy transmission mechanism, the People's Bank of China has further enhanced its interest rate regulation capabilities by adjusting and optimizing open market operations and other means. By changing the 7-day reverse repurchase operation bidding to a fixed-rate quantity bidding, it has clarified its policy interest rate status, improved operational efficiency, and stabilized market expectations. At the same time, the temporary positive and reverse repurchase operations in the afternoon were increased, with interest rates of 20 basis points less and 50 basis points more than the 7-day reverse repurchase operation rate, respectively. This not only maintains sufficient elasticity and flexibility, but also helps guide market interest rates to better operate smoothly around the policy interest rate center, and enhances the role of the 7-day reverse repurchase operation rate as the main policy interest rate.
The report suggests that in the next stage, prudent monetary policy should focus on balancing the relationship between short-term and long-term, stabilizing growth and preventing risks, internal equilibrium and external equilibrium, enhance the consistency of macroeconomic policy orientation, strengthen counter-cyclical regulation, and enhance the trend of sustained economic recovery, so as to create a good monetary and financial environment for completing the annual economic and social development goals and tasks.
People's Daily (August 19, 2024, 18th edition)
