In the past week, the Symposium on the economic situation of major economic provinces and the executive meeting of the State Council have been held one after another, both of which have emphasized increasing macro policy support to keep the economic operation within a reasonable range. The people’s Bank of China has also resorted to measures to stabilize growth through “interest rate reduction” that exceeded market expectations. Next, the new round of loan market quotation rate (LPR) quotation reduction on August 22 is “a certainty” in the market. Experts believe that from the perspective of effectively supporting the real economy, LPR over 1-year period and 5-year period may be reduced, while LPR over 5-year period may be reduced by at least 10 basis points< Br > < div class = "height" > < / div > the financial data and major macro operation data in July show that the effective demand of the real economy needs to be boosted and the economic recovery process is not stable. For this reason, the executive meeting of the State Council held on August 18 pointed out that it is necessary to implement the arrangements of the Party Central Committee and the State Council, strengthen targeted financial and monetary policies to support the real economy, further consolidate the foundation of economic recovery, and maintain the economic operation within a reasonable range< Br > < div class = "height" > < / div > at the same time, the Standing Committee of the State Council has made it clear that it is necessary to improve the formation and transmission mechanism of market-oriented interest rates, give play to the guiding role of quoted interest rates in the loan market, support the recovery of effective demand for credit, and promote the reduction of enterprise comprehensive financing costs and personal consumption credit costs. The pricing basis of LPR has changed due to the reduction of medium term lending facility (MLF) interest rate. In the view of the market, there is no suspense about the price reduction of LPR on August 22< Br > < div class = "height" > < / div > “after the LPR reduction is implemented, it can effectively reduce the financing cost of the real economy, achieve credit stimulation, and drive the economic recovery to speed up.” Ming Ming, chief economist of CITIC Securities, said that in the current situation where the demand for medium – and long-term loans needs to be boosted, the subsequent “asymmetric reduction” of LPR would be more in line with the current policy objectives, which would help banks to make more concessions to medium – and long-term loans and release the demand for medium – and long-term loans. It is expected that the LPR over 5-year period will be reduced by at least 10 basis points this month. After the reduction is implemented, it can effectively reduce the financing cost of the real economy, achieve credit stimulus and help economic recovery< Br > < div class = "height" > < / div > Wen bin, chief economist of Minsheng Bank, also believes that the current level of 3.7% of the 1-year LPR quotation is relatively low. If we continue to guide the 1-year LPR downward adjustment, it will easily aggravate the Arbitrage Behavior of enterprises and increase the risk of idle funds. In contrast, the probability of asymmetric downregulation of LPR over 5 years is greater. In the current weak environment of housing related loans, there is still much room for the mortgage interest rate to fall. However, he also pointed out that if the follow-up economic recovery is not as expected, and the recovery of consumption and investment continues to be weak, there is still room for the 1-year LPR interest rate to be lowered< Br > < div class = "height" > < / div > in addition, Mingming also said that in the future, the central bank may continue to start with the marketization of deposit interest rates and open up the space for LPR reduction by further reducing the bank’s debt end cost, so as to stimulate the financing demand of some entities. Against this background, the deposit interest rate may further decline, reducing the cost pressure on the liability side of commercial banks to a certain extent< Br > < div class = "height" > < / div > (the original title was “LPR or asymmetric downward adjustment of monetary policy for stable growth”)