Central Bank report: significant improvement in Monetary Policy Transmission efficiency
Xinhua News Agency, Beijing, 16 Nov (Reporter Wu Yu) A report released by the people's Bank of China on the 16th showed that the central bank used the method of reform to dredge the transmission of monetary policy, promote the reduction of social comprehensive financing costs, and significantly improve the transmission efficiency. It has created a suitable monetary and financial environment for the realization of "six stability" and high-quality economic development.
According to the report on the implementation of China's monetary policy released by the central bank in the third quarter of 2019, since the third quarter, the central bank has improved the (LPR) formation mechanism in the loan market quotation rate, further unblocked channels and improved the transmission efficiency of monetary policy. At the same time, it announced an across-the-board reduction of 0.5 percentage points, guided the reasonable growth of money supply and social financing scale, and flexibly used policy tools such as medium-term lending facilities to maintain liquidity tightness. In addition, the central bank will reduce the accuracy of urban commercial banks operating only in provincial administrative areas by an additional 1 percentage point, increase the guidance of structural adjustment, and support the development of private, small and micro enterprises.
Overall, prudent monetary policy has been effective and transmission efficiency has improved significantly, the central bank reported. In the first three quarters, RMB loans increased by 13.6 trillion yuan, an increase of 486.7 billion yuan over the same period last year, and the increase was mainly invested in weak links such as private and small and micro enterprises. The cost of comprehensive financing for enterprises has fallen steadily. In September, the weighted average issuance rate of corporate bonds was 3.33%, down 1.26 percentage points from the previous year's high. Among them, the weighted average issuance rate of private enterprise bonds fell 1.8 percentage points from the previous year's high. The interest rate on new corporate loans fell 0.36 percentage points from the previous year's high.
Relevant people from the central bank believe that at present, there are many favorable factors for China's steady economic development, the effects of macro policies are gradually emerging, and there is no basis for sustained inflation or deflation. However, with the increase of external uncertain and unstable factors, the downward pressure on China's economy continues to increase, and the food price index rises by a large margin compared with the same period last year, it is necessary to guard against the divergence of inflation expectations for some time to come.
The report said that in the next stage, the central bank will implement a sound monetary policy, pay attention to expected guidance, and persist in using market-oriented reform methods to reduce the financing cost of the real economy. Guide financial institutions to increase support for the real economy, especially private, small and micro enterprises.