China Fund News Taylor
Hello everyone, Central Bank has sent out major messages continuously.
28 On the afternoon of the afternoon of 28, the official website of the People's Bank of China announced that on September 27, 2022, the National Foreign Exchange Market Self-Discipline Mechanism Video Conference was held. The meeting analyzed the recent operation of the foreign exchange market and deployed relevant work to strengthen self-discipline management. People's Bank of China Deputy Governor and Chairman of China Foreign Exchange Market Steering Committee (CFXC) Liu Guoqiang attended and delivered a speech.
There are the following key points:
1. Since the beginning of this year, the RMB exchange rate has remained basically stable at a reasonable equilibrium level. The RMB exchange rate against the US dollar depreciated, but the depreciation was only half of the appreciation of the US dollar during the same period;
2, the RMB appreciated significantly against the euro, pound and yen, and is one of the few strong currencies in the world at present.
3. The foreign exchange market is of great importance, and maintaining stability is the first priority.
4, People's Bank of China has accumulated rich experience in response and can effectively manage market expectations. The current foreign exchange market is generally standardized and orderly, but there are also a few companies following the trend of "exchange speculation" and financial institutions operating illegally. We should strengthen guidance and correction. The points of
5 and exchange rate are not accurate, and two-way floating is the norm. Don’t bet on the unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose.
6. Member units of the self-discipline mechanism must consciously maintain the basic stability of the foreign exchange market and resolutely curb the ups and downs of exchange rates.
7. Relevant departments should strengthen supervision, management, monitoring and analysis, strengthen expectations management, , and curb speculation.
The following is the full text:
On September 27, 2022, the National Foreign Exchange Market Self-Discipline Mechanism Video Conference was held. The meeting analyzed the recent operation of the foreign exchange market and deployed relevant work to strengthen self-discipline management. Liu Guoqiang, Vice President of the People's Bank of China and Chairman of the China Foreign Exchange Market Steering Committee (CFXC), attended and delivered a speech.
meeting pointed out that since this year, the RMB exchange rate has remained basically stable at a reasonable equilibrium level. CFETS RMB exchange rate index is basically the same as at the end of 2021. The RMB exchange rate against the US dollar depreciated, but the depreciation was only half of the appreciation of the US dollar during the same period; the RMB appreciated significantly against the euro, pound and yen, and is one of the few strong currencies in the world at present.
meeting emphasized that the foreign exchange market is of great importance and maintaining stability is the first priority. The RMB exchange rate remains basically stable and has a solid foundation. Compared with many economies facing the risk of stagflation, my country's economy continues to recover and develop in general, the price level is basically stable, and the trade surplus is expected to remain high. As the macro-policy effect appears, the basic economic situation will be more solid. The current RMB exchange rate formation mechanism is suitable for China's national conditions and can give full play to the role of the market and the government's "two hands". It has withstood the test of multiple rounds of external shocks in history. The People's Bank of China has accumulated rich response experience and can effectively manage market expectations. The current foreign exchange market is generally standardized and orderly, but there are also a few companies following the trend of "exchange speculation" and financial institutions operating illegally. We should strengthen guidance and correction. It must be recognized that the exchange rate point is inaccurate, and two-way fluctuation is the norm. Don’t bet on the unilateral appreciation or depreciation of the RMB exchange rate. If you bet for a long time, you will lose.
meeting requires that member units of the self-discipline mechanism should consciously maintain the basic stability of the foreign exchange market and resolutely curb the ups and downs of exchange rates. Quotation banks should effectively maintain the authority of RMB exchange rate intermediate price ; banks themselves should reasonably carry out self-operated transactions based on the principle of risk neutral to provide real liquidity to the market; member units should further strengthen publicity and guidance on risk neutrality of enterprises and financial institutions, and further improve the service level of helping enterprises avoid risks; relevant departments should strengthen supervision, management and monitoring and analysis, strengthen expectations management, and curb speculation.
People's Bank of China, The State Administration of Foreign Exchange Relevant departments, the People's Bank of China Shanghai Headquarters, and core members of the National Foreign Exchange Market Self-Discipline Mechanism attended the meeting.
htmlOn the 28th, the offshore RMB on plummeted by 900 points, falling below the 7.26 mark. After the news from the central bank came out, the RMB rose by nearly 400 points, and the onshore RMB also rebounded a little.Central Bank set up special re-loans for equipment renewal and transformation Support equipment renewal and transformation in manufacturing and other fields
Central Bank said that it would implement the decisions and deployments of the State Council Executive Meeting on supporting equipment renewal and transformation in weak areas of economic and social development, increase the actual demand for manufacturing and service industries, and boost market confidence. The People's Bank of China set up special re-loans for equipment renewal and transformation, and specifically support financial institutions to provide loans to manufacturing, social services, small and medium-sized enterprises, individual industrial and commercial households at an interest rate of no more than 3.2%.
Among them, the special re-loan amount for equipment update and transformation is more than 200 billion yuan, with an interest rate of 1.75%, with a term of 1 year, and can be extended twice. Each extension period is 1 year . The issuance targets include National Development Bank , Policy Bank , State-owned Commercial Bank , China Postal Savings Bank , Joint-stock Commercial Bank and other 21 financial institutions, providing financial support according to the 100% principal of loans issued by financial institutions that meet the requirements.
In the previous State Council Executive Meeting held on September 13, it was decided to update and transform equipment for manufacturing, service industry, social service fields, small and medium-sized enterprises, individual industrial and commercial households in the fourth quarter, and support national commercial banks to actively issue medium- and long-term loans at an interest rate of no more than 3.2%. The People's Bank of China provides special re-lending support to commercial banks at 100% of the loan principal, with a total amount of more than 200 billion yuan, and the central government subsidizes interest rates for the loan subjects by 2.5%. The actual loan cost of the loan entity for renewing and renovating equipment in the fourth quarter of this year shall not be higher than 0.7%.
Bank people believe that the policy introduced this time has sent a signal - we hope that commercial banks will invest more credit resources in medium- and long-term fixed asset business and continue to increase the investment in medium- and long-term loans.
Relevant person in charge of the People's Bank of China answered reporters' questions about setting up special re-loans for equipment update and renovation
Question: What is the purpose of setting up special re-loans for equipment update and renovation ? Answer: promotes equipment updates and transformation in weak areas of economic and social development, which will help expand the demand for the manufacturing industry, promote consumption recovery and become the main driving force of the economy, and enhance development momentum. According to the matters agreed upon by the State Council Executive Meeting, the People's Bank of China has set up a special re-loan for equipment renewal and renovation, providing low-cost funds to financial institutions, and guiding financial institutions to issue loans to manufacturing and other fields to support equipment renewal and renovation under the premise of independent decision-making and self-supporting risks.
Question : What are the policy support areas and objects of special re-lending for equipment update and transformation? Answer: The areas of support for special re-lending policy include education, health, culture, tourism and sports, training bases, charging piles, urban underground comprehensive pipeline corridors, new infrastructure, industrial digital transformation, key areas of energy conservation, carbon reduction transformation and upgrading, waste home appliance recycling and treatment system, etc. The issuance of special re-loans for equipment renewal and transformation includes 21 financial institutions including the China Development Bank, policy banks, state-owned commercial banks, China Postal Savings Bank, and joint-stock commercial banks.
Question : How to implement for special re-loan for equipment update and transformation? Answer: Special re-loans for equipment update and transformation are implemented in a list management system. Relying on the coordination mechanism for promoting effective investment in important projects, the Development and Reform Commission has formed a list of alternative projects in different fields, together with local governments, relevant central departments and central enterprises. Financial institutions make independent decisions and bear their own risks in accordance with market principles, and issue loans to the items on the list. Special re-loans adopt a direct delivery mechanism of "loan first and then borrow" and are issued monthly. For qualified loans issued by financial institutions to the items on the list at an interest rate of no more than 3.2% from September 1, 2022 to December 31, 2022, the People's Bank of China provides financial support based on the loan principal equal amount.
