Recently, the central bank released the “China Monetary Policy Implementation Report for the First Quarter of 2022” (hereinafter referred to as the report). The statement on real estate is consistent with the statement on real estate at the recent Politburo meeting, which is relatively more positive than before.
In the main policy ideas for the next stage, the report mentioned that it is necessary to build an institutional mechanism for finance to effectively support the real economy. Firmly adhere to the positioning that houses are for living in, not for speculation, insist not to use real estate as a short-term means of stimulating the economy, adhere to stabilizing land prices, house prices, and expectations, prudently implement the prudent management system for real estate finance, and support local governments from local governments. Based on the actual situation, we will improve real estate policies, support rigid and improved housing needs, increase financial support for housing leasing, safeguard the legitimate rights and interests of housing consumers, and promote the healthy development and virtuous circle of the real estate market.
The report pointed out that a prudent monetary policy should increase support for the real economy, and give full play to the dual functions of monetary policy tools in terms of total volume and structure. Since 2022, the monetary policy will take the lead in a stable manner, seek progress while maintaining stability, and make efforts based on changes in the macroeconomic situation, and make comprehensive use of RRR cuts, surrender of profits, Medium-Term Lending Facility (MLF), re-lending, re-discounting, open market operations, etc. We will release liquidity in this way, flexibly grasp the intensity and rhythm of open market operations, and maintain a reasonable and sufficient liquidity in the banking system.
The report highlights that loans from financial institutions have grown moderately and loan interest rates have been further reduced. Guide financial institutions to provide loans in a reasonable manner, and achieve a year-on-year increase in loans in the first quarter, providing strong support for stabilizing the macroeconomic market.