Home » Caring for the liquidity at the end of the year, the central bank restarted the 14-day reverse repurchase after more than two months

Caring for the liquidity at the end of the year, the central bank restarted the 14-day reverse repurchase after more than two months

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Caring for the liquidity at the end of the year, the central bank restarted the 14-day reverse repurchase after more than two months

Original title: To care for the liquidity at the end of the year, the central bank restarted the 14-day reverse repurchase after more than two months

Reporter Hou Jiening trainee reporter Han Yu

On December 19, the People’s Bank of China (hereinafter referred to as the “central bank”) carried out 85 billion yuan of 7-day and 14-day reverse repurchase operations through interest rate bidding to maintain stable liquidity at the end of the year. Among them, the 7-day reverse repurchase is 9 billion yuan, with an operating rate of 2.00%; the 14-day reverse repurchase is 76 billion yuan, with an operating rate of 2.15%. In view of the fact that 2 billion yuan of reverse repurchases expired that day, the central bank’s open market realized a net injection of 83 billion yuan.

It is worth mentioning that this is the first time the central bank has restarted 14-day reverse repos since September 30 this year.

Mingming, chief economist of CITIC Securities, said in an interview with a reporter from the Securities Daily that the central bank restarted 14-day reverse repurchase, and the net increase in open market operations reflects the care for liquidity at the end of the year, stabilizing bond market confidence, and supporting wide credit The policy intent of the fix.

Looking back at the central bank’s recent open market operations, after the 10 billion yuan 7-day reverse repurchase was launched on December 1, the 2 billion yuan 7-day reverse repurchase was carried out from December 2 to December 15 (10 consecutive working days). On December 16, a 7-day reverse repurchase operation of 41 billion yuan was carried out. In addition, the central bank continued to issue MLF of 650 billion yuan on December 15, with a parity increase of 650 billion yuan, and the amount due that month was 500 billion yuan.

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“Towards the end of the year, the demand for market liquidity will increase. The central bank’s early release of liquidity at this time will help stabilize market expectations and achieve a smooth New Year’s Eve.” Wang Youxin, a senior researcher at the Bank of China Research Institute, analyzed to a reporter from the Securities Daily.

The just-concluded Central Economic Work Conference pointed out that “a prudent monetary policy must be precise and powerful. It is necessary to maintain reasonable and sufficient liquidity, keep the growth rate of broad money supply and social financing scale basically matching the nominal economic growth rate, and guide financial institutions to increase Support for small and micro enterprises, technological innovation, green development and other fields.”

Wang Youxin believes that the recent increase in the scale of reverse repurchase by the central bank is also in line with the spirit of the Central Economic Work Conference. Maintaining reasonable and sufficient liquidity is an important condition for increasing support for the real economy, which can effectively reduce the comprehensive financing cost of the market and guide financial institutions to increase support for key areas and weak links of the real economy.

Judging from DR007 (weighted average interest rate of 7-day repurchase of depository institutions in the inter-bank market), an important indicator for judging the tightness of liquidity, data from the National Interbank Funding Center shows that the recent weighted average interest rate of DR007 is below the interest rate of policy tools. As of 17:00 on December 19, the weighted average interest rate of DR007 was 1.7772%.

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Wang Youxin said that after the comprehensive RRR cut was implemented at the beginning of the month, bank funds have been greatly replenished, and it is expected that market liquidity will maintain a reasonable and sufficient state by the end of the year.

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