低利率时代要来了

Core Viewpoint - The recent adjustment of the Loan Prime Rate (LPR) indicates a cautious approach to monetary policy, with the 1-year LPR set at 3% and the 5-year LPR at 3.5%, marking the first rate cut of the year [1][2][18]. Group 1: LPR Adjustment - The 5-year LPR was reduced by 10 basis points from 5% to 3.6% [1]. - The adjustment was anticipated following the May 7 meeting where the central bank announced a 0.1 percentage point reduction in policy rates [2][3]. - Some banks preemptively adjusted their LPR add-on rates before the official LPR cut, indicating a proactive stance in managing lending rates [4][5]. Group 2: Bank Responses - Major banks have adjusted their first loan rates, with some reducing their LPR add-on from LPR-60 basis points to LPR-50 basis points [5][6]. - The increase in add-on rates effectively neutralizes the impact of the LPR cut, maintaining the overall mortgage rates [8][9]. - Banks are raising add-on rates to mitigate risks associated with lower lending rates, particularly to avoid competition with public housing loan rates [10][11]. Group 3: Deposit Rate Changes - Alongside the LPR cut, deposit rates have also been reduced, with significant cuts across various terms [12][13]. - The reduction in deposit rates aims to maintain banks' interest margins amidst the LPR adjustments [14][15]. - The larger cut in deposit rates compared to LPR reflects banks' need to manage their funding costs and liquidity [22][23]. Group 4: Economic Context - The central bank's balance sheet has contracted, indicating a tightening of liquidity in the market, which complicates the monetary policy landscape [25]. - The need for increased government investment and liquidity measures is emphasized to address the challenges of insufficient loan demand [26]. - The potential shift towards zero or negative interest rates is highlighted, suggesting a need for alternative investment strategies to preserve capital [27].