Picture source: See the picture
html The 31-year LPR is 3.65%, and the 5-year and above LPR is 4.3%. This is already the fourth month that LPR has not been lowered, that is, there is no rate cut and .
Image source: Internet
At this point, the LPR implementation standards for the beginning of 2023 have been officially locked. For housing loans that are most closely related to China's interest rates , after the beginning of 2023, they will basically be implemented according to the current data.
LPR has maintained policy stability, which has disappointed many groups who had expectations for "interest rate cuts". The latest LPR of
remains unchanged, which is in line with market expectations.
In fact, since the asymmetric reduction of LPR in August, LPR quotations have been "on hold" in recent months. This is mainly due to the fact that policy interest rates such as MLF have remained unchanged, the rapid rise in funding rates and market fluctuations have put pressure on the liability side of banks, and the net interest margin has been at a historical low due to insufficient credit demand. There is no room for corresponding downward adjustments in LPR quotations.
This article will conduct a special analysis based on the latest trends in LPR, and conduct a well-founded judgment and research on the upcoming trend of China’s interest rates in 2023.
Pay attention to trends, grasp the essence, see the main line clearly, study and judge trends, and guide actions.
This article has repeatedly self-examined its compliance and does not touch red lines. The language is calm and fair, and it is not value-oriented.
The content is well-founded and the analysis is rational and objective.
hardcore content, don’t miss it anymore.
uses small insights to gain insight into opportunities, grasp trends, and guide decision-making.
PS:
- The article is slightly long, and reading the content requires a certain amount of time and patience, as well as thinking.
- content does not seek to please all readers. Writing sharing is also a process of mutual selection between the reading group and the writing group.
- Everyone’s cognitive level is different, so don’t force it. The content of this article is not a generic product, nor is it a refreshing article that can bring relaxation, pleasure and spiritual satisfaction after reading it. Please treat it rationally based on your own needs and cognitive needs.
- exclusive headline article, plagiarism and handling will be investigated!
(If this article is seen on other information platforms, no doubt, it is plagiarism and transfer, shameless)
Choice is greater than effort, thinking determines the level, which is an important rule in any era and any environment.
Picture source: Toutiao Gallery
1
LPR "stand still", what are the country's considerations and reasons behind it?
To understand the reason for LPR adjustment, you need to understand the composition logic of LPR. The pricing formula of
LPR is generally as follows:
LPR=MLF interest rate + bank cost (mainly capital cost).
Whether it is a reduction in reserve requirements or a reduction in deposit interest rates, banks’ capital costs will be reduced to varying degrees.
As the anchor of LPR, the MLF interest rate announced this month remains unchanged, and the market has expected that the LPR will remain unchanged this month;
In addition, since the beginning of 2022, domestic banks have been affected by macroeconomic fluctuations and continued profit concessions to the real economy. The net interest margin and operating pressure of some banks have increased significantly. Large;
Consider domestic city-specific policies policy measures to stabilize the property market. There is still a lot of room, and the country needs to continue to guide various regions to make good use of policy space;
The market's prospects for economic recovery continue to strengthen, and the effects of the package of policies to stabilize the property market are lagging behind, and the property market is expected to bottom stabilize and pick up." .
Overall, the MLF interest rate remained unchanged in December, mainly due to comprehensive considerations of internal and external factors.
On the one hand, although the U.S. CPI fell more than expected for the second consecutive month, the Fed’s resolution and Powell’s speech were hawkish, and the final interest rate expectations increased. There is still at least 75 basis points of room for interest rate hikes in 2023, and there is still room for it in the short term. There are certain constraints on the reduction of my country's policy interest rates;
On the other hand, recent prevention and control adjustments, real estate and other stabilizing growth policies have continued to increase, and various important meetings have actively set the tone to boost market confidence. The general trend of economic stabilization and upward has been basically determined, and the need to continue to lower policy interest rates during the observation period of effective policy effects is not high.
Picture source: See the picture
html The 31-year LPR is 3.65%, and the 5-year and above LPR is 4.3%. This is already the fourth month that LPR has not been lowered, that is, there is no rate cut and .
Image source: Internet
At this point, the LPR implementation standards for the beginning of 2023 have been officially locked. For housing loans that are most closely related to China's interest rates , after the beginning of 2023, they will basically be implemented according to the current data.
LPR has maintained policy stability, which has disappointed many groups who had expectations for "interest rate cuts". The latest LPR of
remains unchanged, which is in line with market expectations.
In fact, since the asymmetric reduction of LPR in August, LPR quotations have been "on hold" in recent months. This is mainly due to the fact that policy interest rates such as MLF have remained unchanged, the rapid rise in funding rates and market fluctuations have put pressure on the liability side of banks, and the net interest margin has been at a historical low due to insufficient credit demand. There is no room for corresponding downward adjustments in LPR quotations.
This article will conduct a special analysis based on the latest trends in LPR, and conduct a well-founded judgment and research on the upcoming trend of China’s interest rates in 2023.
Pay attention to trends, grasp the essence, see the main line clearly, study and judge trends, and guide actions.
This article has repeatedly self-examined its compliance and does not touch red lines. The language is calm and fair, and it is not value-oriented.
The content is well-founded and the analysis is rational and objective.
hardcore content, don’t miss it anymore.
uses small insights to gain insight into opportunities, grasp trends, and guide decision-making.
PS:
- The article is slightly long, and reading the content requires a certain amount of time and patience, as well as thinking.
- content does not seek to please all readers. Writing sharing is also a process of mutual selection between the reading group and the writing group.
- Everyone’s cognitive level is different, so don’t force it. The content of this article is not a generic product, nor is it a refreshing article that can bring relaxation, pleasure and spiritual satisfaction after reading it. Please treat it rationally based on your own needs and cognitive needs.
- exclusive headline article, plagiarism and handling will be investigated!
(If this article is seen on other information platforms, no doubt, it is plagiarism and transfer, shameless)
Choice is greater than effort, thinking determines the level, which is an important rule in any era and any environment.
Picture source: Toutiao Gallery
1
LPR "stand still", what are the country's considerations and reasons behind it?
To understand the reason for LPR adjustment, you need to understand the composition logic of LPR. The pricing formula of
LPR is generally as follows:
LPR=MLF interest rate + bank cost (mainly capital cost).
Whether it is a reduction in reserve requirements or a reduction in deposit interest rates, banks’ capital costs will be reduced to varying degrees.
As the anchor of LPR, the MLF interest rate announced this month remains unchanged, and the market has expected that the LPR will remain unchanged this month;
In addition, since the beginning of 2022, domestic banks have been affected by macroeconomic fluctuations and continued profit concessions to the real economy. The net interest margin and operating pressure of some banks have increased significantly. Large;
Consider domestic city-specific policies policy measures to stabilize the property market. There is still a lot of room, and the country needs to continue to guide various regions to make good use of policy space;
The market's prospects for economic recovery continue to strengthen, and the effects of the package of policies to stabilize the property market are lagging behind, and the property market is expected to bottom stabilize and pick up." .
Overall, the MLF interest rate remained unchanged in December, mainly due to comprehensive considerations of internal and external factors.
On the one hand, although the U.S. CPI fell more than expected for the second consecutive month, the Fed’s resolution and Powell’s speech were hawkish, and the final interest rate expectations increased. There is still at least 75 basis points of room for interest rate hikes in 2023, and there is still room for it in the short term. There are certain constraints on the reduction of my country's policy interest rates;
On the other hand, recent prevention and control adjustments, real estate and other stabilizing growth policies have continued to increase, and various important meetings have actively set the tone to boost market confidence. The general trend of economic stabilization and upward has been basically determined, and the need to continue to lower policy interest rates during the observation period of effective policy effects is not high.
There is another most important reason. The LPR in December is facing the latest pricing date, so standing still is in line with market rules:
The LPR is standing still. It is most likely to coincide with the re-pricing date of most residential mortgages (January 1 each year). At the same time, the December MLF interest rate, which is the basis for LPR quotation, has not changed.
Image source: Toutiao Gallery
2
Review 2022: How many substantial benefits can the several adjustments to LPR during the year bring to China's existing mortgage ?
Since most loans over 5 years are home loans, the interest rate reduction has attracted much attention from home buyers.
According to central bank data statistics, since 2022, LPR has been lowered three times in total, in January, May and August.
Image source: Internet
Among them, the two-term LPR dropped asymmetrically in January. The 1-year LPR was reduced by 10 basis points to 3.7%, and the 5-year LPR was reduced by 5 basis points to 4.6. %;
html In May, the 1-year LPR remained unchanged, but the LPR over 5 years was individually reduced by 15 basis points to 4.45%; html In August, the 1-year LPR was reduced by 5 basis points to 3.65%, and the 5-year LPR was reduced by 15 basis points to 4.3%.It is worth mentioning that since most residents’ mortgage repricing date is January 1st every year, the mortgage interest rate level for the next year is generally based on the 5-year LPR quotation in December of the previous year.
Rough calculation shows that the 5-year LPR will be reduced by a total of 35 basis points in 2022 . Assuming that a home buyer calculates based on the benchmark in equal principal and interest , the existing mortgage interest rate will be reduced by 35 basis points. The rate change means that for a loan of 1 million points with a 25-year term, the monthly repayment of the first set in 2023 can be reduced by about 204.18 yuan, and 2,450.16 yuan can be saved within one year; the monthly repayment of the second set can be reduced by about 209.26 yuan, and 2,511.12 yuan can be saved within one year.
Lowering the LPR, especially the priority lowering and the separate lowering of the 5-year period, is very important for China's economic environment and loan structure. This can gradually reduce incremental and existing mortgage interest rates and home purchase costs, meet and further release residents' rigid needs and improved mortgage loan needs, increase residents' willingness and ability to purchase homes, promote real estate market sales, and promote the property market to pick up as soon as possible.
However, the current problems of China's real estate economy and property market are no longer problems of the market itself. Therefore, even if there are several rounds of LPR cuts in 2022, the marginal effect will not be obvious. This has also become an important reason for staying put until the year-end LPR pricing day.
Image source: Toutiao Gallery
3
Trend Analysis: In 2023, does LPR still have room and imagination for downward adjustments?
In fact, in December 2022, China's various economic stabilization policies continued to increase, and the Central Economic Work Conference released a stronger signal to stabilize growth, expand domestic demand, and boost confidence.
From various dimensions, in order to further stimulate credit demand, activate the vitality of entities, promote the recovery of the property market, and facilitate the recovery of consumption, there is still room for downward adjustment of LPR in 2023.
Considering that banks are facing the task of "making a good start" in early 2023, when credit is in urgent need of development, the LPR reduction can effectively drive down the financing costs of entities and promote credit expansion.
At the same time, after the introduction of the "16" financial support measures for real estate, mortgage loans are still hovering at low levels, and further coordination of credit policies is needed to promote the recovery of real estate sales and investment.
Therefore, an LPR cut in the first quarter of next year may be possible, and an LPR cut of more than 5 years that can better support entities is most necessary.
Also, from the perspective of bank interest spread , the repricing date of residential mortgage loans is usually January 1st every year. It does not rule out the possibility that the quoting bank will delay lowering the 5-year LPR quotation to the first quarter of 2023 from the perspective of maintaining annual asset income. This can not only effectively promote credit growth, but also give itself a time window to further reduce liability costs, which is feasible.
One currency trend worth noting is that at the end of 2022, China's financial system and banks at all levels will see an obvious tightening of liquidity:
December 12 , the central bank released a financial statistics report for November 2022. The data shows that in November, the inter-bank RMB market traded 157.4 trillion yuan in the form of lending, , spot bonds and repurchase, with an average daily turnover of 7.15 trillion yuan.Among them, the average daily turnover of interbank lending was 473.1 billion yuan, the average daily turnover of spot bonds was 1.3 trillion yuan, and the average daily turnover of pledged repurchase was 5.36 trillion yuan.
The weighted average interest rate of interbank lending in November was 1.55%, 0.14 percentage points higher than the previous month, and 0.48 percentage points lower than the same period last year; the weighted average interest rate of pledged repurchase was 1.61%, 0.15 percentage points higher than the previous month, and 0.45 percentage points lower than the same period last year.
Picture source: Internet
Affected by this, the bond market and bank financial management fell one after another.
According to Wind statistics, as of December 18, a total of 3,961 bond funds have seen their net values decline in the past week, accounting for approximately 78%.
In terms of bank financial management, according to Wind statistics, among the 26,706 financial products that had their net worth updated in December, a total of 19,497 had a negative return on net worth in the last week, accounting for 73%.
Due to the impact of bank capital costs, LPR also has the inevitable need to lock in the full-year profit margin before the arrival of a new round of pricing.
Picture source: Toutiao Gallery
is written at the end:
combines reality and shares some exclusive views on China’s economic and monetary environment in 2023
LPR Although there is no change, On the same day the LPR was announced, the central bank announced that in order to maintain stable liquidity at the end of the year, the People's Bank of China carried out 146 billion yuan of 7-day and 14-day reverse repurchase operations through interest rate bidding on December 20, including 5 billion yuan of 7-day period and 141 billion yuan of 14-day period. The interest rate remained the same as before, because 2 billion yuan of reverse repurchase expired today, achieving a net investment of 144 billion yuan.
The central bank has stepped up reverse repurchase operations to smooth out the impact of short-term funding disruptions at the end of the year.
Overall, the prospects for domestic economic recovery are more optimistic, prices are generally moderate and controllable, macro policies are environmentally friendly, and market liquidity remains reasonable and abundant, which is beneficial to both stocks and bonds.
The key still depends on the liquidity of China's monetary environment. The current problem facing China's economic recovery is definitely not the risk of inflation, but the deflationary pressure corresponding to insufficient demand.
2023 is destined to be an important recovery period for China's economy, but such recovery will not happen overnight, let alone pull out onions on a dry land. For the vast majority of ordinary Chinese, there will also be a window of opportunity.
But we must also clearly realize that after the adjustment of epidemic prevention and control, there will be an adjustment period, a breakthrough period, and an adaptation period with uncertainty.
Before the risk is determined, in accordance with China's national style and considerations, it will definitely leave enough room for backup and strength.
Although the downward trend in interest rates is an inevitable trend, although the current mainstream economic theory and value context are that "it is time to go all out for economic development and stable growth."
However, when considering and doing things at the national level, we must make choices and focus on security and development.
2023 is a foreseeable policy year, and there should be a relatively rational understanding of the adjustment of monetary policy :
If China's domestic economic recovery meets expectations in 2023, a reduction in LPR is actually not a must;
But if China's economic demand is insufficient in 2023 and the consumption stimulus effect is not good, how much effect can the LPR reduce again?
The key point when looking at the problem is that LPR is just a window to observe the economy, not a decisive factor.
and above are thematic analysis and interpretation of the latest LPR trends, and are shared with all readers.
Picture source: Toutiao Gallery
According to the latest regulations of relevant national departments, the content and opinions of this article are for reference only and do not constitute any clear advice on property purchase, investment and other behaviors. You must enter the market at your own risk. )
The above text comes from @pandabeibeilittlecutie
How about making a young friend who dares to tell the truth, knows how to tell the truth, and is good at observing?
It is not easy to share original writing. If you think the article is good, please forward it and like it.Follow me
for my original strength and exclusive headlines. If there is any infringement of plagiarism or transfer, we will investigate!
If you have any questions, please leave a message. If it still doesn't work, you can send a private message. Civilized communication. Answer all questions. Thank you.
Among them, the average daily turnover of interbank lending was 473.1 billion yuan, the average daily turnover of spot bonds was 1.3 trillion yuan, and the average daily turnover of pledged repurchase was 5.36 trillion yuan.The weighted average interest rate of interbank lending in November was 1.55%, 0.14 percentage points higher than the previous month, and 0.48 percentage points lower than the same period last year; the weighted average interest rate of pledged repurchase was 1.61%, 0.15 percentage points higher than the previous month, and 0.45 percentage points lower than the same period last year.
Picture source: Internet
Affected by this, the bond market and bank financial management fell one after another.
According to Wind statistics, as of December 18, a total of 3,961 bond funds have seen their net values decline in the past week, accounting for approximately 78%.
In terms of bank financial management, according to Wind statistics, among the 26,706 financial products that had their net worth updated in December, a total of 19,497 had a negative return on net worth in the last week, accounting for 73%.
Due to the impact of bank capital costs, LPR also has the inevitable need to lock in the full-year profit margin before the arrival of a new round of pricing.
Picture source: Toutiao Gallery
is written at the end:
combines reality and shares some exclusive views on China’s economic and monetary environment in 2023
LPR Although there is no change, On the same day the LPR was announced, the central bank announced that in order to maintain stable liquidity at the end of the year, the People's Bank of China carried out 146 billion yuan of 7-day and 14-day reverse repurchase operations through interest rate bidding on December 20, including 5 billion yuan of 7-day period and 141 billion yuan of 14-day period. The interest rate remained the same as before, because 2 billion yuan of reverse repurchase expired today, achieving a net investment of 144 billion yuan.
The central bank has stepped up reverse repurchase operations to smooth out the impact of short-term funding disruptions at the end of the year.
Overall, the prospects for domestic economic recovery are more optimistic, prices are generally moderate and controllable, macro policies are environmentally friendly, and market liquidity remains reasonable and abundant, which is beneficial to both stocks and bonds.
The key still depends on the liquidity of China's monetary environment. The current problem facing China's economic recovery is definitely not the risk of inflation, but the deflationary pressure corresponding to insufficient demand.
2023 is destined to be an important recovery period for China's economy, but such recovery will not happen overnight, let alone pull out onions on a dry land. For the vast majority of ordinary Chinese, there will also be a window of opportunity.
But we must also clearly realize that after the adjustment of epidemic prevention and control, there will be an adjustment period, a breakthrough period, and an adaptation period with uncertainty.
Before the risk is determined, in accordance with China's national style and considerations, it will definitely leave enough room for backup and strength.
Although the downward trend in interest rates is an inevitable trend, although the current mainstream economic theory and value context are that "it is time to go all out for economic development and stable growth."
However, when considering and doing things at the national level, we must make choices and focus on security and development.
2023 is a foreseeable policy year, and there should be a relatively rational understanding of the adjustment of monetary policy :
If China's domestic economic recovery meets expectations in 2023, a reduction in LPR is actually not a must;
But if China's economic demand is insufficient in 2023 and the consumption stimulus effect is not good, how much effect can the LPR reduce again?
The key point when looking at the problem is that LPR is just a window to observe the economy, not a decisive factor.
and above are thematic analysis and interpretation of the latest LPR trends, and are shared with all readers.
Picture source: Toutiao Gallery
According to the latest regulations of relevant national departments, the content and opinions of this article are for reference only and do not constitute any clear advice on property purchase, investment and other behaviors. You must enter the market at your own risk. )
The above text comes from @pandabeibeilittlecutie
How about making a young friend who dares to tell the truth, knows how to tell the truth, and is good at observing?
It is not easy to share original writing. If you think the article is good, please forward it and like it.Follow me
for my original strength and exclusive headlines. If there is any infringement of plagiarism or transfer, we will investigate!
If you have any questions, please leave a message. If it still doesn't work, you can send a private message. Civilized communication. Answer all questions. Thank you.
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