favorable policies are launched simultaneously, and the central bank's "combination punch" boosts market confidence
2024-09-25
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the state council information office held a press conference on the morning of september 24, and the main leaders of the people's bank of china, the financial regulatory bureau, and the china securities regulatory commission introduced the relevant situation of financial support for high-quality economic development. a number of major policies such as lowering the reserve requirement ratio and interest rates, and lowering mortgage interest rates were introduced at the same time to increase the intensity of monetary policy regulation and further support steady economic growth.
with the combined effect of rrr cuts and interest rate cuts, 1 trillion yuan of funds are on the way
at the press conference, the central bank announced that it would cut the deposit reserve ratio by 0.5 percentage points in the near future, providing about 1 trillion yuan of long-term liquidity to the financial market. the deposit reserve ratio may be further lowered by 0.25 to 0.5 percentage points this year, depending on the market liquidity situation.
wang qing, chief macro analyst at orient securities, said that the central bank's announcement of a cut in reserve requirement ratio and interest rate is of great significance to boosting total macroeconomic demand. on the one hand, the reduction in financing costs will directly stimulate consumption and investment demand, give full play to the counter-cyclical regulatory role, and promote the continuous improvement of economic growth momentum; on the other hand, this will also help alleviate the current macroeconomic situation of "strong supply and weak demand" and promote a moderate rebound in prices. at the same time, this set of policy "combination punches" launched by the central bank will also effectively boost market confidence and improve social expectations. at the current stage, this plays a vital role in stabilizing growth, stabilizing the property market, and achieving the annual economic growth target of about 5%.
from a macro perspective, the current domestic and international situation is complicated and economic development faces many challenges. reducing the reserve requirement ratio can increase the capital supply of the banking system and enhance the lending capacity of banks, thereby providing more financial support for the real economy. as the core of the financial system, the liquidity of banks directly affects the financing environment of the real economy. after the reserve requirement ratio is reduced, banks can issue more loans, especially medium- and long-term loans, to meet the capital needs of enterprises in expanding production and upgrading technology, and promote stable economic growth.
from a micro perspective, the rrr cut also has a positive impact on enterprises and individuals. enterprises can more easily obtain bank loans, thereby alleviating financial pressure and accelerating project advancement and business expansion. due to their relatively narrow financing channels, small, medium and micro enterprises are highly dependent on bank loans. after obtaining financial support, they will improve production efficiency and product quality and enhance market competitiveness. for individuals, as bank funds become more abundant, the availability of consumer loans may also increase. whether it is purchasing large items or spending on travel, education and other consumption, individuals have more financial support and choice. the increase in market activity also means more investment opportunities.
the interest rate of existing mortgage loans is reduced by 0.5 percentage points, and the monthly payment of a million-dollar mortgage can be reduced by 300 yuan
at the press conference, the central bank announced that it would reduce the interest rates of existing mortgages and unify the minimum down payment ratio for mortgages, guiding commercial banks to reduce the interest rates of existing mortgages to near the interest rates of newly issued mortgages, with an estimated average reduction of about 0.5 percentage points. at the same time, the minimum down payment ratios for first and second mortgages will be unified, and the minimum down payment ratio for second mortgages at the national level will be reduced from 25% to 15%. it is expected that after this policy interest rate adjustment, the medium-term lending facility rate will be reduced by about 0.3 percentage points, and the loan market quotation rate, deposit rate, etc. will also drop by 0.2 to 0.25 percentage points.
according to statistics from centaline property research institute, the current average interest rate for existing mortgages is about 3.92%, while the average interest rate for new mortgages is about 3.3%, with the interest rate spread between existing and new mortgages reaching more than 60 basis points. as this gap widens further, calls for a "lowering of existing mortgage rates" are growing louder. after the existing mortgage rates are lowered, the interest rate spread between existing and new mortgages is expected to decrease to about 10-15 basis points.
since 2024, the central bank has lowered the lpr for more than 5 years twice, by a total of 35 basis points to 3.85%, and at the same time abolished the lower limit of the first and second mortgage rates at the national level. currently, except for beijing, shanghai and shenzhen, all other cities in the country have abolished the lower limit of interest rates. in jiangsu, the latest mortgage interest rates of many mainstream banks are as low as 2.85%, which is currently the lowest in history.
according to the reporter's calculation, if the mortgage interest rate is reduced by 50 basis points, the monthly payment can be reduced by 300 yuan for a loan principal of 1 million yuan and a repayment method of equal principal and interest for 30 years. after the interest rate of existing mortgages is reduced, the benefits brought by early repayment will also decrease. similarly, based on a loan of 1 million yuan and equal principal and interest for 30 years, if the first repayment is made in september this year and 100,000 yuan is repaid in advance in september, the interest can be saved by 113,800 yuan when the interest rate of the existing mortgage is 4%, and after it is reduced to 3.5%, the interest can be saved by 99,600 yuan, and the benefits brought by early repayment are reduced by 14,200 yuan. this series of interest rate adjustments will help to enhance residents' consumption capacity and confidence and support the stable growth of the economy.
"this is also the second time that the country has lowered the interest rates on existing mortgages since the first lowering of the interest rates last year. it has really reduced the monthly payment burden for home buyers and mortgage-repaying families." yan yuejin, deputy director of the shanghai e-house real estate research institute, believes that the central bank's policy this time covers both existing mortgages and new home purchase needs, with a wide coverage and great benefits. it has played a positive role in reducing home purchase costs, continuously enhancing home buying confidence, and continuously reducing the risks of existing mortgages.
innovative tools are launched, with a total initial quota of 800 billion yuan
it is worth mentioning that this time the central bank created structural monetary policy tools to support the capital market for the first time.
a new special re-lending tool for stock repurchase and increase holdings was established to support listed companies' repurchase and major shareholders' increase in holdings, stabilizing the capital market, with an initial quota of 300 billion yuan. in addition, a swap facility for securities, funds and insurance companies was established to maintain capital market stability and boost investor confidence, with an initial quota of 500 billion yuan.
at present, my country has as many as 18 structural monetary policy tools, which are mainly used to support small and micro private enterprises, technological innovation, green development and other fields. the creation of two structural monetary policy tools this time will focus on supporting the development of the stock market. this fully reflects the central bank's special attention to the capital market under the current economic situation.
the introduction of these innovative tools not only reflects the central bank's emphasis on the stability of the capital market, but also demonstrates its precise efforts in monetary policy regulation. through these measures, the central bank can provide the market with necessary liquidity support, reduce market volatility, and encourage long-term investment behavior, which has a positive effect on stabilizing investor sentiment and enhancing market vitality.
dong ximiao, chief researcher of citic bank and part-time researcher of fudan university's institute of finance, said that the newly created monetary policy tools will better support the stable development of the stock market. these two tools reflect the monetary policy's high attention and strong support for the stability and development of the capital market, and will further increase the liquidity of the stock market, stabilize investor confidence, and promote the stock market to regain vitality.
the central bank said the first phase of the swap facility will be 500 billion yuan, and the funds obtained through this tool can only be used for stock market investment, and the scale can be expanded in the future depending on the situation. wen bin, chief economist of china minsheng bank, believes that securities, funds, and insurance companies can obtain funds in a timely manner and adjust stock positions more flexibly by using swap facilities, thereby promoting the stabilization and recovery of the market. these measures of the central bank also take into account the importance of risk control. by setting up appropriate mechanisms, ensure that the use of funds complies with regulations, prevent the illegal use of funds, and ensure the effectiveness and security of policies.
xinhua daily·jiaohuidian reporter zhan chao
