20240220-东方金诚-2月5年期以上LPR报价单独下调_后期两个期限品种LPR报价还有下行空间_3页_269kb

LPR Adjustment Summary for February 2024

According to the report by Dong Fang Jin Cheng Macro Research:

• On February 20, 2024, the LPR (Loan Prime Rate) quote for the 1-year tenor remained unchanged at 3.45%, while the 5-year and above tenor was lowered to 3.95%. This was a separate adjustment.

• The primary reasons cited include the recent cut in the reserve requirement ratio (RRR), which reduced banks' funding costs significantly, providing incentive for banks to decrease the LPR quote points. The MLF (Medium-Term Lending Facility) rate remained stable, but other factors like earlier deposit rate cuts by banks and decreases in relending rates contributed to lower bank funding costs.

• The action is expected to directly impact new issued corporate long-term loans and residential mortgages by lowering interest rates, helping to stimulate investment demand and stabilize the real estate market. It signals a policy focus on supporting steady growth and楼市 stability.

• Factors supporting further downward pressure include persistently low CPI and PPI data, indicating subdued inflation and economic weakness. The report suggests that overcapacity or restrictions on policy rates may trigger additional LPR cuts in the future to mitigate actual interest rate pressures, potentially aiding macroeconomic demand.

• Looking ahead, key points involve continuing LPR adjustments to support demand-side policies, with a focus on soft landing in the real estate sector through mortgage rate reductions. The analysis indicates that policy actions are likely to intensify to address economic stagnation and promote recovery.

Dong Fang Jin Cheng Macro Research

• Authors: Wang Qing, Li Xiaofeng, Feng Lin
• Disclaimer: This summary is for reference only and does not constitute investment advice. See full report for details.