Foreign Trade Enterprises Are Expected To Reduce Financing Costs

Industry analysts pointed out that the adjustment focused on alleviating the problem of "expensive financing", and at the same time reformed in the regulation and control. Through asymmetric interest reduction, expanding the floating interest rate of deposit interest rates and the time limit of the debrief benchmark interest rate, we should advance the interest rate marketization reform in an orderly way. In the capital market, the continuous interest rate cut and the deposit reserve ratio will certainly release huge liquidity, and most manufacturing enterprises will benefit.

A few days ago, the people's Bank of China announced that the benchmark interest rates for one-year deposits and loans were reduced by 25 and 40 basis points respectively from November 22nd onwards, and the upper limit of deposit interest rates was expanded. After 2 years and 4 months, the people's Bank of China once again cut interest rates.

　　 cost Commodity exports are welcome.

Industry analysts generally believe that the interest rate cut will be a substantial positive factor for the manufacturing sector, especially for the industry. Exit The LED industry, which is slowing down and slowing domestic demand, will undoubtedly bring industrial development opportunities to it.

Experts predict that in the capital market, the continuous interest rate cut and the deposit reserve ratio will certainly release huge liquidity, liquidity or will completely abandon the tightening situation, usher in the upward turning point, raise the equity risk premium, most manufacturing industries will benefit. "Reducing loan interest rates will reduce our borrowing costs, reduce the erosion of financial costs to profits, and at the same time, boost corporate profitability. It will solve great difficulties for companies with high debt ratios." Xiong manager, an exporter of LED products in Xiamen, told reporters. "Both large and medium-sized enterprises, especially capital intensive manufacturing enterprises, all hope to reduce costs. The most direct effect of interest rate reduction on enterprises is to reduce the cost of capital." Bear manager said.

Lu Xingwei, chief economist of Industrial Bank, said: "this interest rate cut will help reduce the cost of financing in the early next year when the stock loan is re priced, especially for small, micro, three rural, and real estate industries with the benchmark lending rate as the benchmark."

　　 Or cause Devaluation of RMB

The central bank unexpectedly issued a sharp sword to cut interest rates, causing financial markets to shake violently. For the first time in more than two years since the central bank announced the first rate cut, the Yuan's exchange rate against the US dollar has reached a new low since the end of 9.

Analysts expect the central bank to cut interest rates or start the devaluation cycle of the renminbi, which will increase the volatility of the renminbi in the future. This year will become the year when the first RMB exchange rate has fallen since 2005. "Cutting interest rates is an unexpected move. We have always believed that the central bank is more likely to reduce liquidity to release more liquidity. Against the backdrop of PPI's negative growth, the fall of PMI in October showed that the demand for the real economy was insufficient, deflation or exceeding the government's acceptable bottom line. Loose monetary policy is designed to ease the downward pressure on the economy. Lin Cai Yi, chief economist of Guotai Junan, said.

As China cuts interest rates and the US is about to enter the cycle of raising interest rates, the interest rate gap between China and the United States has begun to shrink, and international hot money is likely to accelerate its outflow. Asian currencies have generally fallen under the guidance of the yen, while the US dollar index has risen 10% in the second half of this year.

With the withdrawal of quantitative easing (QE) by the Federal Reserve, the continued strengthening of the US dollar or greater pressure on the devaluation of the renminbi will take place.

China, the second largest economy in the world, is going to have an impact on the global economy, citing warnings from analysts.

Economists explain that the PBC's unexpected asymmetric interest rate cuts are intended to be loose, which will devalue the renminbi and facilitate commodity exports. Taking into account the difficulty of the current collection, this is equivalent to not lowering interest rates on deposits, but a substantial reduction in interest rates on loans, which undoubtedly brings a timely rain to Chinese enterprises with heavy debts and weak terminal demand.

China's economic growth rate slowed to 7.3% in the third quarter, the lowest level since the outbreak of the global financial crisis, and policymakers are concerned about the risk of falling to below 7%. Producer price index has continued to decline in the past three years, the pressure on enterprises is growing, and consumer inflation is also showing signs of weakness.

The central bank said that China's economic growth is at a reasonable level, and the prudent monetary policy orientation will not change. Ma Jun, chief economist of the central bank's Research Bureau, said: "the interest rate cut does not mean the turning of monetary policy, but to maintain the continuity and stability of monetary policy."