The report on the implementation of China's monetary policy in the first quarter of 2022 (hereinafter referred to as the report) issued by the people's Bank of China on May 9 pointed out that a prudent monetary policy should strengthen its support for the real economy, stabilize the word, take the initiative to respond, boost confidence, do a good job in cross cycle regulation, firmly refrain from "flooding", give full play to the dual functions of the total amount and structure of monetary policy tools, and implement various financial policies and measures to stabilize enterprises and ensure employment, Focus on supporting small and micro enterprises and difficult industries and vulnerable groups affected by the epidemic. The report also disclosed for the first time that the people's Bank of China has established a market-oriented adjustment mechanism of deposit interest rate under the guidance of the interest rate self-discipline mechanism. After the establishment of the new mechanism, the bank's deposit interest rate has a higher degree of marketization. Under the background of the overall decline of the current market interest rate, it is conducive to the bank to stabilize the debt cost and promote the further decline of the actual loan interest rate. The report points out that we should make good use of various monetary policy tools, maintain reasonable and sufficient liquidity, enhance the stability of the growth of total credit, keep the growth of money supply and social financing scale basically match the economic growth, and maintain the basic stability of macro leverage ratio. Structural monetary policy tools actively do a good job in "addition", guide financial institutions to make reasonable loans, and promote the preference of financial resources to key areas, weak links and enterprises and industries seriously affected by the epidemic. Timely increase the amount of refinancing for supporting agriculture and small businesses, make good use of Pratt & Whitney small and micro loan support tools, scientific and technological innovation refinancing and Pratt & Whitney pension special refinancing, pay close attention to carbon emission reduction support tools and support the use of special refinancing for clean and efficient utilization of coal. We will improve the formation and transmission mechanism of market-oriented interest rates, optimize the policy interest rate system of the central bank, strengthen the supervision of deposit interest rates, give play to the important role of the market-oriented adjustment mechanism of deposit interest rates, strive to stabilize the cost of bank liabilities, continue to release the efficiency of the reform of quoted interest rates in the loan market, and promote the reduction of comprehensive financing costs of enterprises. Wang Qing, chief Macro Analyst of Dongfang Jincheng, said that the policy tone of the monetary policy implementation report in the first quarter of this year was more positive than that of the fourth quarter monetary policy report in 2021, which emphasized "strengthening cross cycle regulation" and "pushing forward". He believes that a special refinancing and rediscount plan similar to that in 2020 may be introduced in the second quarter, and more areas will be included in the scope of targeted support. Meanwhile, in the second quarter, it is possible to continue to cut interest rates and reserve requirements. The medium-term lending facility (MLF) interest rate may be lowered by 10 basis points again, and the deposit reserve ratio may be lowered by 0.5 percentage points. It is worth noting that the report disclosed for the first time that in April 2022, the people's Bank of China guided the interest rate self-discipline mechanism and established a market-oriented adjustment mechanism for deposit interest rates. The member banks of the self-discipline mechanism reasonably adjusted the deposit interest rate level with reference to the bond market interest rate represented by the yield of 10-year Treasury bonds and the loan market interest rate represented by the one-year loan market quotation interest rate (LPR). The establishment of a market-oriented adjustment mechanism of deposit interest rate focuses on promoting the further marketization of deposit interest rate, and the guidance to banks is flexible. The bank can independently determine the actual adjustment range of its deposit interest rate according to its own situation and with reference to the changes of market interest rate. Wen bin, chief researcher of China Minsheng Bank, said that with the establishment of the market-oriented adjustment mechanism of deposit interest rate and the overall reduction of reserve requirement by 0.25 percentage points in April, it is expected to promote the reduction of LPR quotation in May, so as to release the potential of LPR reform, effectively reduce the comprehensive financing cost of the real economy and increase the effective credit demand. (Xinhua News Agency)