The People’s Bank of China reformed the interest rate mechanism, and the market interpretation was to cut interest rates in disguise. Today, China’s A-shares closed up. The Shanghai Composite Index rose 2.1%, rising for the fourth consecutive day. The market was hot, and the total turnover of the two cities increased by more than 35% to 581.6 billion yuan (RMB, the same below).

The Shanghai Composite Index opened 0.41% higher this morning. It stabilized in the early stage. Afterwards, the increase continued to widen. It closed at the highest level in the whole day and closed at 2,883 points, up 59 points or 2.1%, with a turnover of 247.92 billion yuan.

The Shenzhen Component Index also closed at the highest level in the whole day, closing at 9328 points, up 268 points or 2.96%, with a turnover of 334.507 billion yuan.

The Shanghai and Shenzhen 300 Index reported 3791 points, up 80 points or 2.17%; the GEM index was 1622 points, up 54 points or 3.5%.

All sectors rose almost all online, financial and real estate stocks rose more than 3%; chemical, coal, cement, electricity, steel, oil stocks rose more than 2%; non-ferrous metals stocks rose more than 1%; only semi-new stocks were soft.

The PBOC announced the reform of the Loan Market Quote Rate (LPR) as the benchmark for bank loan pricing. From Tuesday, the National Interbank Funding Center will announce the loan market quotation rate at 9:30 am on the 20th of each month. The quotation line of the loan market quotation rate will be quoted to the interbank lending center in the form of the open market operating rate plus points. After the inter-bank lending center removes the highest and lowest quotations, it calculates the loan market quotation rate by the average method.

According to the analysis, after the loan market interest rate quotation mechanism is clear, the PBOC will lower the overall interest rate level of the market by lowering the MLF interest rate. The policy focus is to reduce the financing costs of the real economy. At present, the downward pressure on the economy is still large. The short-term disguised “reduction of interest rates” and the timely adjustment of the MLF interest rate are still expected.