On March 20, the People's Bank of China authorized the National Interbank Funding Center to announce the new loan market quoted interest rate (LPR), which remained unchanged from the previous period. The 1-year LPR was 3.0% and the 5-year and above LPR was 3.5%. At present, the LPR quotation has remained unchanged for 10 consecutive months.
From the perspective of economic fundamentals, my country's economic performance has been generally stable since the beginning of the year, and foreign trade import and export data have performed better than expected. In January this year, the central bank issued a package of monetary and financial policy measures, including lowering interest rates on various structural monetary policy tools by 0.25 percentage points. Market institutions generally believe that there is little urgency in adjusting policy interest rates and LPR quotations in the short term, and there is a high probability that they will continue to remain stable.
From the perspective of interest rates, current social financing costs remain low. In February this year, the weighted average interest rate of new corporate loans was about 3.1%, about 20 basis points lower than the same period last year; the weighted average interest rate of new personal housing loans was about 3.1%, about 10 basis points lower than the same period last year.
Recently, the Party Committee of the People's Bank of China held an enlarged meeting and made it clear that it will guide and regulate interest rate levels based on changes in the economic and financial situation and macroeconomic operations. "The central bank will strengthen the implementation and supervision of interest rate policies, standardize financing intermediate fees, and ultimately achieve the goal of promoting the low operation of comprehensive social financing costs." Dong Ximiao, chief economist of China Merchants Union, told the Securities Times reporter that if the economic operation faces new downward pressure or changes in the external environment, comprehensive interest rate cuts and reserve requirement ratios may still be implemented, but RRR cuts should precede interest rate cuts. It is expected that the LPR will not decrease significantly during the year, perhaps 5 to 10 basis points.
