On November 6, peoplebankcurrencyThe Policy Department published a signed article “Continuing to Deepeninterest rate“Market-oriented Reform” is also the second in a series of interpretation articles on “Implementing the Spirit of the Central Financial Work Conference” released by the central bank.
The Central Financial Work Conference emphasized the need to persist in deepening the structural reform of the financial supply side.interest rateMarketization is one of the core contents of the financial supply-side structural reform.
The article pointed out that peoplebankWe will adhere to the fundamental purpose of financial services to the real economy, continue to deepen the market-based reform of interest rates, improve the market-based interest rate formation, regulation and transmission mechanisms, better play the key role of interest rates in the allocation of financial resources, and guide the continued decline and improvement of financing costs. The quality and effectiveness of monetary policy in supporting the development of the real economy.
The work of reducing existing mortgage interest rates has been basically completed
The article first points out that the peoplebankEfforts were made to promote the marketization of deposit and loan interest rates, timely adjustments and optimization of mortgage interest rate policies, and effective maintenance of the order of competition in the interest rate market. The market-oriented reform of interest rates achieved new results. Specifically:
In terms of promoting the marketization of deposit and loan interest rates, the first is to promote the reform of the loan prime rate (LPR). In August 2019, the People’s Bank of China reformed and improved the LPR quotation formation mechanism, and LPR became the reference benchmark for loan interest rate pricing by financial institutions. Since the reform, the 1-year LPR and the 5-year and above LPR have decreased by 0.8 and 0.65 percentage points respectively, driving the weighted average interest rate of corporate loans from 5.32% in July 2019 to 3.82% in September 2023, according to statistics lowest level since.
The second is to establish a market-based adjustment mechanism for deposit interest rates. In April 2022, the People’s Bank of China guided the establishment of a market-based adjustment mechanism for deposit interest rates. Members of the interest rate self-discipline mechanism will reasonably adjust deposit interest rate levels with reference to changes in market interest rates. In September 2022, June and September 2023, major financial institutions took the initiative to lower deposit interest rates three times. The interest rates for medium and long-term time deposits were reduced even more, and the degree of marketization of deposit interest rates was significantly improved. In September 2023, the weighted average interest rate of new time deposits was 2.04%, a decrease of 0.4 percentage points from April 2022.
In terms of adjusting and optimizing mortgage interest rate policies, the People’s Bank of China and the former China Banking and Insurance Regulatory Commission will establish a dynamic adjustment mechanism for new first-home loan interest rate policies in December 2022; the People’s Bank of China will lower the interest rates for first-home loans and second-home loans respectively in May 2022 and August 2023. The lower limits of the mortgage interest rate policy are 0.2 and 0.4 percentage points; the People’s Bank of China and the State Administration of Financial Supervision will promote the reduction of existing first-home loan interest rates in August 2023.
The article stated that the work of reducing existing mortgage interest rates has been basically completed. More than 22 trillion yuan in existing mortgage interest rates have been reduced, with an average decrease of 0.73 percentage points, benefiting more than 50 million households and 150 million people, and reducing borrowers’ interest expenses by 160-170 billion yuan every year. The average household decreases by 3,200 yuan per year.
In terms of maintaining the order of competition in the interest rate market, financial institutions are urged to adhere to the principle of risk pricing and straighten out the relationship between loan interest rates and market interest rates such as government bond yields; actively promote lending institutions to express the annual interest rates of loans; urge financial institutions to standardize deposit interest rate pricing practices , to prevent unreasonable pricing behaviors that undermine the order of market competition.
Improve market-oriented interest rate formation, regulation and transmission mechanisms
The article pointed out that the People’s Bank of China will adhere to the fundamental purpose of financial services to the real economy and continue to deepen the market-oriented reform of interest rates. The article also further clarifies the three priorities for continuing to deepen the market-oriented reform of interest rates.
The first is to improve the formation, regulation and transmission mechanism of market-oriented interest rates, unblock the channels for funds to enter the real economy, and promote the optimization of the allocation of financial resources. Continuing in the currency market, bond market,creditMarket cultivationpledgeModerepurchaseInterest rates (DR), Treasury bond yields, LPR and other indicator interest rates enhance the authority and credibility of market benchmark interest rates and play an important role as the pricing benchmark for floating interest rate financial products. Improve the interest rate transmission mechanism of “market interest rate + central bank guidance → LPR → loan interest rate” and “LPR + government bond yield → deposit interest rate”.
The second is to promote further marketization of deposit and loan interest rates and persist in using reform methods to guide the continued decline of financing costs. Continue to release the effectiveness of LPR reform, enhance the guidance of LPR on actual loan interest rate pricing, and consolidate the effectiveness of corporate financing and residents’ credit cost reduction. Give play to the important role of the market-based adjustment mechanism for deposit interest rates, guide financial institutions to reasonably determine the level of deposit interest rates based on changes in market interest rates, and enhance the ability and sustainability to support the real economy. Further improve the interest rate self-discipline mechanism.
The third is to continue to improve the marketization of mortgage interest rates to better support rigid and improved housing demand. Resolutely implement the requirements for promoting a virtuous cycle of finance and real estate, continue to improve differentiated housing credit policies, give full play to the role of the dynamic adjustment mechanism for new first-home loan interest rate policies, continue to expand the space for independent pricing of mortgage interest rates in an orderly manner, and support city governments to make good use of policies based on city-specific policies. toolbox.
(Source of article: Brokerage China)
Source of article: Brokerage China
Original title: Regarding mortgage interest rates, the central bank’s latest release
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