The first quotation of the Loan Market Quotation Rate (LPR) mechanism reform implemented by the Central Bank of China on Tuesday is lower than the current benchmark lending rate for the same period, and is also regarded by the market as equivalent to an asymmetric interest rate cut.
So, for the reform of LPR mechanism aiming at promoting market-oriented interest rate reform and dredging monetary transmission mechanism, is it really a rate cut? The answer seems less certain.
Lianping, chief economist of Bank of Communications, and Chen Ji, senior researcher of Bank of Communications, did point out that the adjustment of LPR mechanism should not be equated with interest rate reduction. The adjustment of LPR mechanism is an important step in the marketization of interest rate. The establishment of new LPR mechanism has short-term impact and long-term significance.
"Since it is an important measure of financial reform, the market's view that the adjustment of the LPR mechanism is almost equal to the reduction of interest rates is obviously biased. However, it is clear that the way to promote a significant reduction in financing costs of enterprises through a more market-oriented loan pricing mechanism is clear. According to the above article.
It should be noted that LPR is only the quotation of financial institutions for loans to large and high-quality customers. The reduction in price does not represent the decrease in the weighted interest rate of real Renminbi loans. The decrease in the comprehensive interest rate should be less than the decrease in the starting point.
Zhao Jian, president of Xize Research Institute, said in a public document entitled "The Mind of the Central Mother", that under the background that the Central Bank of the world has started a wave of interest rate cuts and the Federal Reserve, whose economic data are still good, can not help joining, the Central Bank of China has "stood still" (several BP of the LPR reduction is not a central bank interest rate cut).
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