The Central Bank's $500 billion SLF investment in the five major banks is equal to a full reduction in the quota
2018-03-20 16:33:04 Shandong Changyong Metal Products Co., Ltd.. Reading
On the evening of September 16, some agencies told the "First Financial Daily" that the Central Bank informed the five major banks on that day and will make 100 billion SLFs for each family in the last two days for a period of three months. It is similar in nature to the release of basic currencies, with an approximate reduction of 0.5 percentage points, and short-term easing of monetary policy.
SLF, also known as standing lending facility, was created in early 2013 by our central bank. Standing lending facilities are the normal liquidity supply channels of the central bank. Their main function is to meet the large liquidity needs of financial institutions for a long period of time.
SLF targets are mainly policy banks and national commercial banks. The duration is 1-3 months. The interest rate level is determined in accordance with the monetary policy regulation and the need to guide the market interest rate. Standing lending facilities are issued in the form of mortgages. Qualified collateral includes high-credit bond assets and high-quality credit assets
From international experience, central banks usually use a combination of standing lending facilities and open market operations to manage liquidity. The main features of standing loan facilities are: First, financial institutions initiate the initiative, and financial institutions can apply for standing loan facilities according to their own liquidity needs; Second, standing loan facilities are "one-to-one" transactions between central banks and financial institutions, which are well-targeted. Third, the standing loan facility has a wide range of counterparties, usually covering deposit financial institutions.
"The magnitude of 500 billion is equivalent to a total reduction in the level, which basically blocked the call for a reduction in the level of foreign exchange due to the transfer of foreign exchange this month. Zhong Zhengsheng said that it is said that the central bank's interest rate for the SLF is very low(not the usual understanding of the punitive interest rate), and today the debt market has exchanged 10BP, and the long-term debt has dropped 3BP, and the big bank has bought to reduce the long-term debt rate. The signal is obvious. This shows the central bank's intention to guide the financing costs downward.
Some banking analysts said that the amount was early again in terms of easing the pressure on capital. Of course, there was a need for higher liquidity before the National Day holiday, which may be the biggest reason for this policy.
Mr Chung said it now appeared that the issuance of new shares and end-of-season factors could lead to large fluctuations in short-term liquidity, and that the management of deposit deviation indicators could lead to earlier fluctuations, a point that would likely be advanced to the SLF. Moreover, the SLF without reverse buybacks may not want to send too loose a signal, as did the PSL(Mortgage Supplement Loan) directed to CDB in April.
According to the market analysis, the probability of subsequent reductions in interest rates is almost invisible.
According to the banking analysts, the continuation of targeted reduction measures is in line with expectations, but this time more targeted reduction, the market may form a positive stimulus. The central bank has limited policy tools at its disposal and presents a dilemma in terms of policy objectives. The actual significance of directional demotion
According to the banking analysts, the continuation of targeted reduction measures is in line with expectations, but this time more targeted reduction, the market may form a positive stimulus. The central bank has limited policy tools at its disposal and presents a dilemma in terms of policy objectives. The actual significance of targeted reduction is less, and the problem of insufficient effective demand for credit under the background of bad rebound is difficult to solve by targeted reduction. Most of the pressure on deposit deviation is on joint-stock banks rather than big state-owned banks.
is not uncommon. After the subprime mortgage crisis, the developed economies of the West were racing against the problem of firms 'preference for lending, and trying structural monetary policy was an unfinished business. Zhong Zhengsheng said that traditional monetary policy has been "kidnapped." In the context of the need not to relax the power of targeted development, but to "drip irrigation" and not "flood irrigation", the central bank basically "snow" the traditional monetary policy(interest rate cut and reduction). On the one hand, it is because the reduction in interest rates is inconsistent with the requirements of innovative macro-control methods. On the other hand, it is also due to the fact that there are many new types of ammunition in the monetary policy toolbox. "We must not confuse the short and medium term: looking ahead, double-rate adjustments are possible; But for now, the central bank will only 'tinker'. "
Prime minister Li Keqiang has stated not long ago that he will continue to adhere to a prudent monetary policy. While stabilizing the total amount, he must also carry out structural control, that is, implement targeted control. "What China has been pursuing since last year is a prudent monetary policy, and we have not relied on a strong thorn