What signal did the central bank release when it stopped contracting MLF?

To put it simply, the market is not short of money, and Yang Ma no longer releases water.

News background: On June 65438+1October 65438+July, Yang Ma said that she would not continue to do MLF, and the People's Bank of China also claimed to carry out 500 billion MLF operations and 2 billion open market reverse repurchase operations.

Let me talk about a knowledge point first: What is MLF? MLF is a medium-term lending facility, which is a common market currency tool to maintain market liquidity. The People's Bank of China is the central bank, requiring commercial banks to mortgage some of their financial collateral to him, and then the central bank will provide loans to these commercial banks to support designated enterprises such as agriculture, rural areas and farmers. The so-called medium term here refers to the loan period of the central bank to commercial banks, which is generally three months, six months and one year.

Adjusting the interest rate every three months will have an impact on the assets, liabilities and market expectations of financial institutions, guide them to provide cost funds to the real economic sectors in line with national policies, and promote the reduction of social financing costs. Essentially, it creates a better financial environment for the development of the real economy.

Let's talk about why not shrink back to MLF. It is the trend of the central bank to continue to shrink MLF under the weak demand situation, and the monetary policy remains stable. To put it bluntly, it is to meet the needs of financial institutions to release water. So we won't do MLF any more, that is to say, the maturity of MLF this month is 500 billion yuan, but there are many bank deposits and there is no shortage of this part of funds, so we will put this part of funds into the market to increase market liquidity, so we won't shrink back and continue to do it.

So what signal does this release? The signal released is to continue to promote the growth of the market economy on the premise of stabilizing market liquidity. Simply put, the market is not short of money, but short of liquidity. It also shows that most people in the market are clutching their money bags and dare not spend and invest casually. Therefore, to revitalize the market economy, we must make great efforts in a targeted manner.

According to the analysis of experts, MLF will not shrink in 10, which is conducive to keeping liquidity in the banking system at a relatively abundant level, supporting commercial banks to continuously increase loans in the fourth quarter, and making good use of more than 500 billion yuan of special bonds according to law. The release of the local balance limit in the month will play a strong role in promoting bank credit in the short term, and the leverage effect of policy and development financial instruments on corporate loans will continue to appear.

In addition, with the economic recovery, the financing needs of market players are also rising. Under this circumstance, new loans in the fourth quarter are expected to continue the trend of increasing year-on-year, and become the main force to promote the process of wide credit, providing the necessary financial environment for the macroeconomic growth rate to approach the normal level in the fourth quarter and even early next year.

In fact, market monetary instruments are only a means to stabilize the market. As an enterprise, to stand out from the encirclement, it needs to have its own strength and product competitiveness. Market economy still depends on market rules and the environment of economic development. China has a good production capacity and a huge market. As these economic participants, it is not a problem for us to do a good job in industrial upgrading and digital transformation, to do our own production planning, not to be conservative or aggressive, to do industry in a down-to-earth manner and to grow steadily.