The Central Bank Expected to Maintain Flexibility in Open Market Operations
Analysts predict that the central bank will continue to adjust open market operations in order to maintain reasonable and sufficient liquidity. This comes after the central bank launched a 137 billion yuan 7-day reverse repurchase operation through interest rate bidding on January 2, with the winning interest rate being 1.80%. As a result, the central bank achieved a net withdrawal of 869 billion yuan from the open market that day, as 764 billion yuan of 7-day reverse repos and 242 billion yuan of 14-day reverse repos expired.
This week, the market will see a concentrated expiration of large reverse repos, with a total of 2.664 billion yuan of reverse repurchase due to expire. Analysts believe that funding has become looser after the New Year’s Eve, but due to the impact of the tax period and the upcoming Spring Festival, funding disturbance factors still exist.
As a result, the central bank is expected to continue to flexibly adjust open market operations to ensure that there is reasonable and sufficient liquidity. This news comes from the Shanghai Stock Exchange, and analysts will be closely monitoring the central bank’s actions in the coming weeks.