GuShiio.com ① The “Report” pointed out that a moderately loose monetary policy should be implemented. Comprehensively use a variety of monetary policy tools to adjust and optimize policy intensity and rhythm at appropriate times.
② The Report has 5 columns, 4 of which are related to monetary policy tools. Industry insiders believe that this also reflects some of the central bank’s regulatory ideas. The subsequent central bank’s policy toolbox is expected to continue to enrich, and monetary policy functions will continue to expand.
Financial Union, February 13 (Reporter Wang Hong)Today, the central bank released the fourth quarter of 2024 China’s monetary policy implementation report (hereinafter referred to as the “Report”), and pointed out that a moderately loose monetary policy should be implemented. Comprehensively use a variety of monetary policy tools to adjust and optimize policy intensity and rhythm at appropriate times. The “Report” also pointed out that it will promote a decline in corporate financing and resident credit costs. Experts pointed out that judging from the statement of the “Report”, it is unlikely that interest rates will be cut in the near future.
The Report has five columns, four of which are related to monetary policy tools. Industry insiders believe that this also reflects some of the central bank’s regulatory ideas. The subsequent central bank’s policy toolbox is expected to continue to enrich, and monetary policy functions will continue to expand. Among them, Column 2 revealed the latest results of the two tools, and expressed the need to promote insurance institutions to participate in swap facilitation operations, and continuously optimize relevant policies to improve the convenience of using the two tools. Box 5 mentions the need to build a long-term mechanism for the development of pension finance and support financial institutions in establishing pension finance franchises.
Moderately loose monetary policy does not mean that interest rate cuts are close
The “Report” pointed out that a moderately loose monetary policy should be implemented. Comprehensively use a variety of monetary policy tools, adjust and optimize policy intensity and rhythm according to the domestic and foreign economic and financial situation and financial market operation, maintain sufficient liquidity, and make the scale of social financing and money supply growth consistent with economic growth and overall price levels. Expected goals match. Promote a reasonable recovery in prices as an important consideration in grasping monetary policy and promote prices to remain at a reasonable level.
Xuan Changneng, deputy governor of the central bank, also recently stated that he will comprehensively use various monetary policy tools such as interest rates and deposit reserve ratios to maintain sufficient liquidity and ensure a loose social financing environment.
The “Report” also pointed out that we should strengthen the guidance of the central bank’s policy interest rate, improve the formation and transmission mechanism of market-oriented interest rates, give full play to the role of the market interest rate pricing self-discipline mechanism, strengthen the implementation of interest rate policies, enhance banks ‘independent and rational pricing capabilities, and promote the decline of corporate financing and residents’ credit costs.
In the view of Dong Ximiao, chief researcher of the China Recruitment Alliance, it is worth noting that the third quarter monetary policy report proposed to promote the steady decline in corporate financing and resident credit costs, while the fourth quarter “Report” went further and proposed to promote corporate financing and resident credit costs fell. “But this does not mean that a rate cut is close, and it is unlikely that a rate cut will be cut in the near future.”
“This year’s RRR cuts and interest rates are already certain events, but the timing is not yet clear. It should be that when the external situation is basically implemented, the effect of the policy will be more ideal,”some industry insiders also pointed out to a reporter from the Financial Union.
Dong Ximiao also said that the net interest margin of commercial banks in the third quarter of 2024 has fallen to 1.53%, which is at a historical low. He suggested that the LPR decline in 2025 should remain within a reasonable range and implement an asymmetric decline with the policy interest rate, that is, the policy interest rate reduction is greater than the LPR decline. At the same time, banks should strengthen refined management and further reduce various costs by taking measures such as lowering deposit interest rates and reducing hidden fees.
4 columns focus on monetary policy tools
The reporter from the Financial News Agency noted that the “Report” has set up five columns, four of which are related to monetary policy tools. They include the historical evolution and innovation of traditional tools such as deposit reserve, refinancing, and open market operations, as well as the implementation of new capital market tools.
Industry experts said that for a long time, the central bank has maintained reasonable and sufficient liquidity in the banking system by flexibly combining the three traditional tools of deposit reserve, reloan rediscount and open market operations, creating a suitable currency to support the stable and healthy development of the real economy. Financial environment. At the same time, traditional monetary policy tools are also advancing with the times, and the monetary policy framework continues to transform.
Zheng Kuifang of the Financial Markets Department of CCB said that since 2024, the central bank’s monetary policy control tools and measures have undergone significant changes compared with the past, greatly enriching the monetary policy toolbox and adapting to changes in economic growth models, financing structures and capital flow forms. It is expected that in the future, the central bank will be more proficient in liquidity release, monetary policy regulation will be more precise and refined, and cross-market regulation capabilities will be significantly enhanced.
Promote insurance institutions to participate in swap facilitation operations
In September 2024, the central bank created two tools to support the capital market for the first time, namely, the Securities, Fund, and Insurance Company Swap Facility (hereinafter referred to as the “Swap Facility”) and the Stock Repurchase Increase and Refinancing.
Column 2 of the Report reveals the latest results of the two tools. As of the end of January 2025, a total of 2 operations have been carried out for swap facilitation, with a total amount of 105 billion yuan, supporting a significant increase in the scale of proprietary stock investment by securities companies. As of the end of 2024, my country’s listed companies have disclosed that the maximum amount of loans they intend to apply for repurchase and increase holdings is nearly 60 billion yuan; in 2024, the maximum amount of repurchase and major shareholder increase plans disclosed is close to 300 billion yuan, a record high.
The central bank said it will work with relevant departments to guide financial institutions to improve comprehensive and comprehensive financial services to listed companies and major shareholders, promote insurance institutions to participate in swap facilitation operations, and continuously optimize relevant policies to improve the convenience of using the two tools., Better maintain the stability of financial markets.
Support financial institutions to establish pension finance franchises
Among them, the “Report” pointed out that it is necessary to increase the supply of pension finance and broaden the financing channels for the silver economy. Support financial institutions to establish pension financial franchises, formulate special pension credit policies, innovate financing service models, expand credit for the development of silver economic business entities and industrial clusters, and support qualified silver economic enterprises to issue corporate credit bonds, list or list financing, expand diversified funding sources channels.
“Doing five major articles well is a strategic choice made based on the current situation and future trends of my country’s economic and social development. It must not only be done well in the short term, but also in the medium and long term. The same is true for pension finance. my country’s population aging itself is relatively high. Affected by factors such as population births in history, current and future population births, and extended life expectancy, the level of population aging will continue to increase rapidly in the future. In this case, it is necessary to take a long-term view. Consider doing a good job in pension finance.” Lou Feipeng, a researcher at the Postal Savings Bank, said this.
