Group 1: MLF Rate Adjustment - The MLF interest rate was lowered by 0.3 percentage points to 2.00%, which is a larger decrease than the short-term policy rates[1] - The People's Bank of China (PBOC) conducted a 300 billion MLF operation on September 25, 2024, aiming to smooth the interest rate curve and reduce transmission efficiency losses[1] - The total net withdrawal of MLF in September was 291 billion, marking the second consecutive month of reduction, with a total of 392 billion in August and September combined[1] Group 2: Future Expectations - It is anticipated that the LPR and deposit rates will also see a reduction of 20-25 basis points following the MLF rate cut[1] - The PBOC is expected to implement a reserve requirement ratio (RRR) cut of 25 basis points in December and potentially another 50 basis points in early 2025, maintaining a forecast of a total RRR cut of 100 basis points for the year[1] - The current MLF balance stands at 68,780 billion, with expectations of continued replacement through government bond purchases over the next two years[1] Group 3: Market Implications - The recent MLF operations are part of a broader strategy to modernize the monetary policy transmission mechanism and improve market liquidity[1] - The significant appreciation of the RMB is largely attributed to the timing of the Federal Reserve's rate cuts, with expectations for domestic monetary policy to effectively support domestic demand[1] - The central bank's actions are aimed at stabilizing the interest rate transmission mechanism, particularly in relation to the real estate market and corporate lending[1]
MLF缩量降息操作点评(2024.9):MLF为何降价缩量?
Huajin Securities·2024-09-25 10:00