Following the short -term and medium -term policy interest rates last week, the People's Bank of China will announce the adjustment of the loan market quotation interest rate (LPR) on Tuesday (June 20).Analysts predict that the one -year and five -year LPR will be reduced to revitalize the economy, especially the real estate market.
If the central bank is expected to reduce LPR, this will be the first time the interest rate has been lowered since August last year.
According to a survey of 32 analysts and traders, all interviewees are expected to be reduced by one -year and five -year LPR.Of these, 21 people believe that the one -year LPR will reduce 10 basis points from 3.65%to 3.55%, and the remaining 11 people believe that the range of interest rate cuts is from 5 to 15 basis points.
As for the five -year LPR, half of the respondents believe that at least the lower level will be deeper, that is, at least 15 basis points; the other 14 people believe that the 10 basis points will be reduced to 4.2%.
Xie Dongming, the research director of the Greater China of Overseas Chinese, also believes that LPR will be reduced in an interview with Lianhe Morning Post, and it is predicted that the one -year and five -year LPR will be reduced by 10 and 15 basis points respectively.
The market is expected to be asymmetric and interest rate cuts show that the government is concerned about real estate issues
This five -year LPR downgrade is higher than the one -year LPR. Xie Dongming calls "asymmetric interest rate cuts".
Xie Dongming said that asymmetric interest rate cuts also appeared in the past interest rate cuts in the central bank. For example, the interest rate cut in August last year, the five -year LPR downgrade was 10 basis points more than the one -year period.
Xie Dongming analyzed that China's mortgage interest rate was linked to the five -year LPR, which reduced the five -year LPR to "support" the real estate market.
He said: "Now the market is increasingly understanding one thing, that is, real estate has become the most important factor in dragging down the Chinese economy. Although interest rate cuts may not be able to save real estate, at least it shows an attitude and shows the government's attention to the attention of the government.The problem to real estate. "
Analysts interviewed by Reuters also mentioned that the Chinese government may significantly lowered the five -year LPR in a sharp drop in order to stimulate housing demand and support the real estate industry.
But whether the five -year LPR can effectively stimulate the property market is still to be observed.Zhao Yaoting, a global market strategist in Jingshun Asia Pacific, told Reuters that the biggest risk of the interest rate cut policy is that Chinese families and businesses are too conservative. As soon as they see interest rate cuts, they quickly deleverage leverage and repay their debts, so the interest rate cut policy will become invalid.
Zhao Yaoting also foresees that the Chinese government will launch more targeted financial and stimulating measures.
A series of macroeconomic data released by China last Thursday (15th) is not as expected. Among them, the unemployment rate in May rose to a new high of 20.8%in May, highlighting the lack of endogenous economic momentum.
The State Council of China held a executive meeting the next day (16th) to propose changes to the economic situation, and more powerful measures must be taken to promote the economy. Policy measures with conditions must be introduced and implemented in a timely manner.
