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China's Central Bank Has Raised Its Rediscount And Reloan Interest Rates For The First Time In Two Years.

2010/12/30 9:14:00 62

The announcement of the people's Bank of China has been raised since December 26th (last Sunday). Financial institution Loan ( Refinancing Interest rates rose by 0.52 percentage points to 3.85% in one year. At the same time, the rediscount rate was raised from 1.80% to 2.25%. Both were adjusted for the first time in two years.

According to Reuters, the increase in rediscount rate reflects the intention of the regulator to shrink the money volume. There are five interest rates of the Central Bank of China, namely the reloan interest rate and the rediscount rate. deposit reserve rate The excess deposit reserve interest rate and the interest rate of the central bank bills.

The Central Bank of China announced on Saturday the second increase in interest rates during the year. Since December 26th, the benchmark interest rate for one-year Renminbi deposits and loans has increased by 0.25 percentage points respectively.

The central bank website also showed that its six month interest rate on loans to financial institutions rose from 3.24% to 3.75%; the three month reloan rate rose from 3.06% to 3.55%; twenty days reloan rate rose from 2.79% to 3.25%.

Noun explanation:

Rediscount rate: rediscount is the behavior of banks to rediscount discounted bills. The rediscount rate is the interest rate stipulated by the central bank for rediscount of discount notes held by commercial banks. It represents a certain rate of rebate in the amount of rediscount bills.

The effect of rediscount rate change on stock market: rediscount rate reflects the regulatory intention of macro-control departments. The so-called discount is that commercial banks use discounted commercial paper to rediscount the central bank, which is essentially equivalent to a central bank's loan to commercial banks, and the discount rate is equal to the loan interest rate. The increase in interest rates reflects the intention of the regulator to shrink the money volume, reflecting the intention to expand the money supply. So theoretically, the rise in rediscount rate is equivalent to reducing the money supply and the stock market should fall. Interest rates fall on the contrary, of course, the actual market performance is more complicated. The adjustment of rediscount rate can only affect short-term fluctuations, but it can not change the original movement trend of the stock market as a whole.

Refinancing: the central bank loan refers to the loan issued by the central bank to the financial institutions. It is an important channel for the central bank to regulate the basic currency and a traditional policy tool for financial regulation. It is customarily referred to as refinancing. Through adjusting the interest rate of refinancing, the central bank will affect the cost and availability of commercial banks to obtain credit funds from central banks, so that money supply and market interest rates will change. For example, when the central bank wants to tighten monetary policy, it can raise the interest rate of reloans, increase the cost of commercial banks' loans to central banks, and curb commercial banks' loans to central banks, thereby reducing the amount of basic money invested.