The People’s Bank of China’s work conference in the second half of 2021 set the tone for monetary policy, financial supervision, and financial opening in the second half of the year.
On July 31, the Central Bank announced that on July 30, the second half of 2021 will be held at a work conference to summarize the work of the People’s Bank of China in the first half of the year. Key tasks for six months.
In terms of monetary policy that has received the most attention, the meeting proposed to stick to the word of stability, and the statement that “stable monetary policy should be flexible, accurate, reasonable and appropriate” also continued the central economy. The tone of the working meeting. The meeting reiterated the comprehensive use of multiple monetary policy tools to maintain reasonable and sufficient liquidity, guide reasonable growth of loans, maintain the growth rate of money supply and social financing scale basically match the nominal economic growth rate, and maintain the macro-leverage ratio basically stable.
The central bank also emphasized that it is necessary to do a good job in the design of inter-cycle policies, and to grasp the pace and intensity of policy implementation. At the same time, when the Politburo of the CPC Central Committee held a meeting on July 30 to deploy economic work in the second half of the year, it emphasized that “we must do a good job in the cross-cycle adjustment of macroeconomic policies” and “make overall plans for the convergence of macroeconomic policies for the next two years.”
CICC pointed out that such a formulation has at least two implications: in the short term, it is difficult for the policy to relax significantly and quickly, and it is not appropriate to over-expect the loose currency; in the medium term , The discretionary nature of the policy has been further strengthened.
CITIC Securities expects that the overall monetary policy will remain stable during the year, and will continue to focus on support for the recovery of small and medium-sized enterprises and difficult industries. In terms of liquidity, MLF maturities in August and September amounted to 700 billion yuan and 600 billion yuan, respectively. Given that the July RRR cut has released about 1 trillion long-term liquidity, it is expected that the central bank will conduct a moderate reduction in hedging operations. , To maintain the continuation of the environment with reasonable and abundant liquidity.
In terms of interest rates, in the context of continuous LPR standing still, the meeting proposed to continue to deepen the reform of interest rate marketization and promote the stability and decline of real loan interest rates. Regarding the exchange rate, the meeting proposed to deepen the reform of the RMB exchange rate formation mechanism and keep the RMB exchange rate basically stable at a reasonable and balanced level.
The central bank’s second key task in the second half of the year focuses on green finance, proposes to promote the implementation of carbon emission reduction support tools, provide low-cost funds to qualified financial institutions, and guide Financial institutions provide preferential interest rate financing for key areas with significant emission reduction effects.
” Effectively prevent and resolve major financial issues”Insurance” is still an important work of the central bank in the second half of the year. The meeting proposed to closely monitor and investigate risk points in key areas. Implement major financial risk accountability and financial risk notification systems. Strengthen local party and government risk handling territorial responsibilities. Promote key provinces. The number of high-risk institutions is declining.
On how to continue to strengthen macro-prudential management, the central bank proposed to improve the macro-prudential policy framework. The macro-prudential policy guidelines will be issued in a timely manner. Step by step Carry out macro-prudential stress testing, establish a countercyclical capital buffer evaluation mechanism and conduct annual evaluations. Promote the supervision of financial holding companies. Strengthen the supervision of systemically important financial institutions.
Real estate financial supervision On the other hand, it is necessary to implement a good real estate financial prudential management system.
In terms of further promoting financial opening, the meeting proposed to continue to implement the financial industry’s opening-up commitments and actively benchmark High international standards to promote the formation of a higher level of financial opening based on the negative list. Coordinate and coordinate the national opening, the opening of pilot free trade zones, and the bilateral or regional openings made through free trade agreements. Continue to promote green finance International cooperation.
The central bank’s proposed deepening of financial reforms in key areas in the second half of the year focuses on the internationalization of the RMB and foreign exchange.
div>The meeting proposed to continue and prudently advance the internationalization of the RMB, deepen foreign currency cooperation, and develop the offshore RMB market. Launch a pilot program for high-level opening of cross-border trade and investment. Expand the pilot program for trade balance facilitation and support more regions, especially the central and western regions Regional participation in the pilot. Promote the reform of foreign debt registration and management, and improve the management policy of overseas institutions’ domestic issuance of bonds. Steadily promote the digital RMB research and development pilot.
It is worth mentioning that it is different from the beginning In the work conference, the central bank specifically listed the supervision of platform companies as a key task, and proposed to supervise and guide platform companies to make comprehensive rectifications in accordance with regulatory requirements, and maintain a high pressure on virtual currency trading speculation.