The central bank announced heavily： cut interest rates!
Source Xinhua News Agency
Drop by 10 basis points! 1-year LPR decreased to 3.35%
On July 22nd, the People’s Bank of China authorized the National Interbank Funding Center to announce that on July 22nd, 2024, the quoted interest rate (LPR) in the loan market was: 1-year LPR was 3.35%, and 5-year LPR was 3.85%, both down 10 basis points from the previous period.
In order to strengthen the expected management and promote the better connection between the LPR release time and the financial market operation time, the LPR release time will be adjusted from 9: 15 am to 9: 00 am on July 22, 2024.
The People’s Bank of China decided to appropriately reduce or exempt the collateral operated by MLF.
In order to increase the scale of tradable bonds and ease the pressure of supply and demand in the bond market, the People’s Bank of China announced on July 22nd that it has decided that from this month, participating institutions of the Medium-term Lending Facility (MLF) with the demand for selling medium-and long-term bonds can apply for the phased reduction of MLF collateral.
The 7-day reverse repurchase operation is lowered to 1.7% with the fixed interest rate.
On July 22nd, the People’s Bank of China issued an announcement on the open market business, announcing that the 7-day reverse repurchase operation in the open market will adopt fixed interest rate and quantity bidding from now on, and the operating interest rate will be adjusted from 1.8% to 1.7%.
The reporter learned that the 7-day reverse repo operating interest rate in the open market has basically assumed the function of the main policy interest rate. It is beneficial to strengthen the policy attribute of the 7-day reverse repo rate, enhance the authority of the policy interest rate, and effectively stabilize market expectations by optimizing the previous price bidding to a fixed interest rate and quantity bidding.
The operating interest rate of the 7-day reverse repurchase in this open market has dropped from the previous 1.8% to 1.7%, which is the first adjustment since August 2023.
Experts said that the 7-day reverse repurchase operation rate will be lowered by 10 basis points, which is conducive to increasing financial support for the real economy. The downward adjustment of policy interest rate is expected to be gradually transmitted to the real economy through the financial market, which will promote the reduction of comprehensive financing costs, consolidate the positive trend of economic recovery, and break the negative cycle of downward and expected weakening of long-term bond yields.
Original title: "The central bank announced heavily: cut interest rates! 》
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