Today (May 10th), the People’s Bank of China released the implementation report of China’s monetary policy in the first quarter, which pointed out that the prudent monetary policy in the first quarter was flexible, moderate, accurate and effective, which created a good monetary and financial environment for the economic recovery.
First, maintain a reasonable and sufficient liquidity. At the beginning of the year, the RRR was lowered by 0.5 percentage point, and the medium-and long-term liquidity was released to exceed 1 trillion yuan. In addition, tools such as open market operation, medium-term lending facilities and refinancing were comprehensively used to maintain a reasonable and sufficient liquidity. Pay attention to guiding financial institutions to strengthen the balanced supply of credit and provide stable and sustainable financial support for the economy.
The second is to promote the steady decline of financing costs. We will lower the interest rates of small loans and rediscounts for supporting agriculture by 0.25 percentage points, continue to promote the marketization of deposit interest rates, and guide the market quotation rate (LPR) of loans with a term of more than five years to fall by 0.25 percentage points in February.
The third is to guide the adjustment and optimization of credit structure. We will set up a 500-billion-yuan refinancing for scientific and technological innovation and technological transformation, relax the criteria for identifying small and micro-credit loans, expand the scope of support tools for carbon emission reduction, and do a good job in the "five major articles" of finance.
The fourth is to keep the exchange rate basically stable. Adhere to the decisive role of the market in the formation of the exchange rate, give full play to the adjustment function of the exchange rate to the macro-economy and balance of payments, strengthen the expected guidance, and prevent the risk of exchange rate overshoot.
The fifth is to strengthen risk prevention and resolution. Improve financial risk monitoring and evaluation, and properly handle risks in key regions and key institutions. Promote the debt risk resolution of financial support financing platform in an orderly manner. Strengthen the construction of financial stability guarantee system.
The report believes that the strategic opportunities and risk challenges facing China’s current economic development coexist. The kinetic energy of global economic recovery is divided, uncertainties such as monetary policy adjustment and geopolitical conflicts in developed economies still exist, and the domestic economy continues to pick up and still faces many challenges. We should also see that China’s stable economic foundation, many advantages, strong resilience and great potential, a good start and a good recovery are the basic characteristics and trends of the current economic operation, and we should enhance our confidence in doing a good job in economic work. In the next stage, the People’s Bank of China will maintain the stability of monetary policy, enhance the consistency of macro-policy orientation, strengthen countercyclical and cross-cyclical adjustment, increase support for the real economy, and effectively consolidate and enhance the positive trend of economic recovery.
A prudent monetary policy should be flexible, moderate, accurate and effective. Reasonably grasp the relationship between the two largest financing markets of bonds and credit, guide the reasonable growth and balanced supply of credit, maintain reasonable and abundant liquidity, and keep the scale of social financing and money supply matching the expected targets of economic growth and price level. Taking maintaining price stability and promoting moderate price recovery as an important consideration to grasp monetary policy, strengthening policy coordination and keeping prices at a reasonable level. We will continue to deepen the interest rate marketization reform, give play to the role of the loan market quotation interest rate reform and the deposit interest rate marketization adjustment mechanism, and promote the steady decline of corporate financing and residents’ credit costs. Adhere to focus, reasonable and moderate, progress and retreat, and provide effective support for key areas and weak links such as inclusive finance, scientific and technological innovation and green development. Smooth the transmission mechanism of monetary policy and avoid the idling of funds. Adhere to a managed floating exchange rate system based on market supply and demand, with reference to a basket of currencies, give full play to the decisive role of the market in exchange rate formation, comprehensively implement policies and stabilize expectations, resolutely correct procyclical behaviors, prevent the market from forming unilateral expectations and strengthen itself, resolutely guard against the risk of exchange rate overshoot, and keep the RMB exchange rate basically stable at a reasonable and balanced level. Continue to effectively prevent and resolve risks in key areas, and resolutely hold the bottom line where systemic risks do not occur.
(CCTV reporter Zhang Daofeng)