The central bank announced late on May 10, down financial institutions RMB benchmark lending and deposit interest rates since May 11, 2015. The one-year benchmark lending rate by 0.25 percentage point to 5.1%; year benchmark deposit rate by 0.25 percentage point to 2.25%, while the combination of market-oriented reforms to promote the interest rate, the upper limit of the floating range of interest rates on deposits of financial institutions by the benchmark deposit 1.3 times the adjusted interest rate is 1.5 times; all other grades of loans and deposit benchmark interest rate, adjusted individual housing provident fund deposit and lending rates.
This is the second time this year the central bank to cut interest rates. People's Bank of China Research Bureau Lu Lei told the "Daily Economic News" reporter, the causes and dynamics of this rate cut, and cut interest rates to the real economy conduction effect of the interpretation.
There is room for conventional monetary policy
One is to play the role of a counter-cyclical macro-control tools. Downward pressure on the economy since the first quarter of 2015 faced, the general price level remains low, nominal interest rates are determined by appropriate funding costs down in order to achieve practical real sector of the economy steadily objective need, in order to stabilize the real economy run as expected. The real interest rate after considering price factors, the interest rate adjustment reflects the robustness of monetary policy.
The second is to play a pre-tune and fine-tune monetary policy functions. Synchronization cut one-year deposit and lending rates by 0.25 percentage points, you can play the market is expected presetting and fine-tune the effect. On the one hand, the interest rate policy as a traditional monetary policy tools, their use means that policy space still exists, the effects of policies by lowering the cost of financing the real economy in order to improve the financial situation can be clearly expected, and the current so-called "Chinese version of QE" argument is set up In traditional monetary policy tools fail, the lack of space on the basis of the operation, the amount of China's monetary policy and the recent, comprehensive use price tools in combination with a large room for discrepancies. On the other hand, the adjustment reflects a 0.25 percent despite the economic downturn there is a big pressure, but we have the economic potential to form a new economic growth point, growth poles, growth development zone.
Conducive to float 50% Market Pricing
First, the deposit insurance system in order to further promote the interest rate market-oriented reforms laid the institutional foundation. May 1st Deposit Insurance Act officially announced for further expansion of the deposit interest rate floating range limit, or even abolish the floating range of security system created a microscopic mechanisms: Under the premise to ensure the safety of depositors, financial institutions can have a broader independent pricing space, so that the market supply and demand play a decisive role in the allocation of financial resources.
Second, the pricing behavior of deposit-taking financial institutions in order to further promote the interest rate market has laid a foundation. From recent data, state-owned and joint-stock commercial banks did not take "a floating top" approach in the 30% range of deposit interest rates go up, go up 50 percent in favor of financial institutions and clients comprehensive evaluation of their own endurance to achieve market pricing, parties to the transaction the concerns will inevitably shift the risk premium from the benchmark interest rate. It can be said, from the deposit and loan market situation, the timing of fully liberalized ceiling on deposit rates, the conditions are ripe.
Just is not enough to reduce financing costs
First, the macro-control policy instruments needed to play the role of a portfolio. Interest rate policy is just counter-cyclical macro-control policy adjustment tool to guide expectations also need taxation, industry, regional policy for the financial sector and the real economy to boot, just to reduce the cost of financing is not enough, you also need an effective demand for financing in order to optimize financial resources stock and incremental configuration.
Second, the macro and micro policy instruments needed to play the role of a portfolio. Interest rate policy to guide social financing costs also need effective financial regulatory policies and laws encourage financial innovation to be fit to play, such as expanding the proportion of direct financing, the role of financial innovation in business and technology innovation, reduce short-term macro-control economic sectors over-reliance policy, based on steady growth, adjusting the structure to achieve long-term, pro-reform, benefit people's livelihood
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