Central bank heavy data! Reduce the RRR and interest rate during the year？ The latest interpretation of experts
On December 13th, the financial statistics and social financing data of November 2023 released by the People’s Bank of China showed that RMB loans in China increased by 1.09 trillion yuan in November, a year-on-year decrease of 136.8 billion yuan. The scale of social financing increased by 2.45 trillion yuan, 455.6 billion yuan more than the same period of last year.
Screenshot Source: Central Bank official website
At the end of November, the balance of broad money (M2), the stock of social financing scale and the balance of RMB loans increased by 10%, 9.4% and 10.8% respectively. On the whole, finance strongly supported the real economy.
In the first 11 months of this year, RMB loans increased by 21.58 trillion yuan, which exceeded the level of last year, and the credit support for the real economy remained stable.
Experts interviewed by Securities Times pointed out that due to the high base last year, the year-on-year growth rate of M2 and the scale of new RMB loans declined in November, but overall, financial support for the real economy continued unabated and the credit structure improved. At present, China’s policy focus is shifting from monetary policy to industrial policy and fiscal policy, and credit supply will remain stable and orderly.
The credit structure improved in November.
In November, RMB loans increased by 1.09 trillion yuan, and the scale of new credit in that month showed a trend of "month-on-month increase and a slight decline year-on-year". In terms of structure, corporate loans remained stable and residents’ loans improved in the month.
The report on the implementation of monetary policy in the third quarter released by the People’s Bank of China recently proposed that efforts will be made to strengthen the balanced supply of loans, coordinate the credit work at the end of the year and the beginning of the year, and moderately smooth credit fluctuations. The general view of market institutions is that credit supply will tend to be stable at the end of the year, and there will be no ups and downs.
Wen Bin, chief economist of Minsheng Bank, said that considering that local governments have issued a large number of special refinancing bonds since October, some existing loans will be repaid one after another in November, which will hedge the total amount of new loans, but the overall stability is at a reasonable level.
In terms of sectors, household loans increased by 292.5 billion yuan in November, of which short-term loans increased by 59.4 billion yuan and medium-and long-term loans increased by 233.1 billion yuan; Loans from enterprises and institutions increased by 822.1 billion yuan, of which short-term loans increased by 170.5 billion yuan, medium-and long-term loans increased by 446 billion yuan, and bill financing increased by 209.2 billion yuan; Loans from non-banking financial institutions decreased by 20.7 billion yuan.
Wen Bin pointed out that residents’ short-term loans and medium-and long-term loans performed well in that month. Under the influence of the "double 11" shopping festival in that month and the low base in October, residents’ short-term loans were improved. Under the superposition of the real estate market support policy and the reduction of the interest rate of existing mortgage loans, the residents’ medium and long-term loans were boosted in that month.
For the bill financing of the month, Wang Xianshuang, co-chief analyst of Guangfa Securities Bank, believes that some banks increased their holdings of bills at the end of the year, which was a "good start" at the beginning of the year.
The scale increment of social integration remained stable.
In November, the scale of social financing increased by 2.45 trillion yuan, 455.6 billion yuan more than the same period of last year. Among them, RMB loans to the real economy increased by 1.11 trillion yuan, a year-on-year decrease of 44.7 billion yuan; The net financing of government bonds was 1.15 trillion yuan, 499.2 billion more than the same period of last year, which was the main reason for the increase in the scale of social financing in that month.
"The increase in net financing of government bonds is a bright spot in the social integration data in November." Zhang Xu, chief fixed income analyst of Everbright Securities, told reporters that each sub-item of social financing, including government bond financing, reflects the financial support that the real economy gets from the financial system.
Zhang Xu emphasized that issuing loans and purchasing government bonds and corporate bonds are all ways for the financial sector to provide support to the real economy. "The financial sector buys government bonds, and the financial system spends the funds raised by bond issuance to the real economy. This process will obviously make the real economy get funds." He said.
He also pointed out that at the end of the year, the central government will issue another 1 trillion yuan of national debt, which has formed a strong support for the growth of social integration. Last year, the influence of high base is gradually fading, and it is currently in a new rebound band of social financing growth.
In addition, trust loans, undiscounted bank acceptance bills and net financing of corporate bonds increased year-on-year in November. Among them, trust loans increased by 19.7 billion yuan in November, an increase of 56.2 billion yuan over the same period of last year; Undiscounted bank acceptance bills increased by 20.3 billion yuan, an increase of 1.2 billion yuan over the same period of last year; The net financing of corporate bonds was 133 billion yuan, 72.6 billion yuan more than the same period of last year.
Credit supply will remain stable and orderly.
At the end of November, the balance of broad money (M2) was 291.2 trillion yuan, up 10% year-on-year, and the growth rate was 0.3 and 2.4 percentage points lower than that at the end of last month and the same period of last year respectively. The balance of narrow money (M1) was 67.59 trillion yuan, up 1.3% year-on-year, and the growth rate was 0.6 and 3.3 percentage points lower than the end of last month and the same period of last year respectively. The scissors difference between the two is further widened compared with last month, reflecting the low efficiency of fund activation, and the confidence of enterprises and residents needs to be restored at present.
Since the beginning of this year, the year-on-year growth rate of M1 has shown a downward trend as a whole, and its performance has been sluggish in the past two months. Zhang Xu believes that this aspect is due to the fact that enterprises have improved the efficiency of the use of funds and converted demand deposits into wealth management products with both liquidity and profitability or other types of deposits; On the other hand, it also reflects that the foundation of China’s sustained economic recovery still needs to be further consolidated.
Looking forward to the future monetary policy, Li Chao, chief economist of Zheshang Securities, believes that the currency side is expected to maintain a tight balance. Considering the pressure of international balance of payments, it is difficult to cut interest rates, and the probability of RRR reduction during the year is not great. The RRR reduction may be in the first quarter of next year. At present, China’s policy focus is shifting from monetary policy to industrial policy and fiscal policy. It is expected that monetary policy will assist industries and fiscal policy, and credit supply will remain stable and orderly, avoiding ups and downs, and the structure will increase and decrease.
Wen Bin believes that under the general tone of the Central Economic Work Conference that "a prudent monetary policy should be flexible, moderate, accurate and effective" and that the credit supply should be "moderate in total amount and steady in pace", the growth of monetary credit will not only maintain solid support for the real economy, but also emphasize sustainable and stable supply to better match the macroeconomic development and the needs of business entities. Financial institutions will accurately grasp the laws and new characteristics of the supply and demand of money and credit, strengthen the dual adjustment of the total amount and structure of money supply, better smooth the monthly and quarterly fluctuations, and promote the stable growth of China’s economy with the stability of credit growth.