Original title: Continued 100 billion-level reverse repurchase, the central bank to increase capital investment at the end of the year
Beijing Business Daily (Reporter Liu Sihong) As the end of the year is approaching, the central bank continues to increase open market operations. On December 29, the central bank’s official website announced that in order to maintain stable liquidity at the end of the year, the central bank launched a 200 billion yuan reverse repurchase operation through interest rate bidding on the same day, with a period of 7 days and an interest rate of 2.2%, which was consistent with the previous one. Due to the expiration of 10 billion yuan in reverse repurchase, the central bank realized a net investment of 190 billion yuan in this operation.
This has been the central bank’s operation of 100 billion yuan-level reverse repurchase for two consecutive working days. On the previous two trading days on December 27 and 28, the central bank issued announcements separately saying that in order to maintain stable liquidity at the end of the year, interest rate bidding was carried out. A reverse repurchase operation of 50 billion yuan and 200 billion yuan was completed, with a period of 7 days, and the winning interest rate of 2.2%.
The central bank continues to increase short-term capital investment. From the industry’s point of view, it can obviously play a role in maintaining stability and avoiding excessive increase in capital prices. For example, Zhou Maohua, an analyst at the Financial Markets Department of Everbright Bank, pointed out that the recent central bank’s open market operations “increased volume” mainly to meet the funding needs of the year-end year. The recent increase in institutional demand for funding for the new year has led to a strong rebound in market interest rates. The central bank’s recent open market operations have released that the central bank will maintain reasonable and adequate market liquidity through a variety of policy tools based on market interest rate trends, and the funding is expected to be stable for the new year.
The end of the year is usually the time when the price of funds is most likely to rise sharply. On the one hand, deposit institutions face year-end MPA assessment and fund settlement tasks, and the liquidity that can be released will be significantly reduced; at the same time, on the demand side, all assets purchased through leverage need to be cross-cut. Years of operation. When the liquidity supply drops significantly and the demand for funds remains unchanged, the price of funds will naturally rise in stages.
The central bank has taken several actions to protect market liquidity in December. Previously, the central bank’s overall RRR cut by 0.5% and the 500 billion MLF (Mid-Term Lending Facility) sequel will bring more liquidity increments to over 1 trillion yuan; at the end of the year, it will increase its open market operations in due course. After continuous heavy volume reverse repurchase operations, some Shibor (Shanghai Interbank Offered Rates) products have a downward trend. Among them, on December 29, the overnight Shibor fell 27.3 basis points to 1.343%, and the 14-day product fell 4.1 basis points to 3.058 %, however, the 7-day variety rose 0.5 basis points to 2.25%.
Zhou Maohua pointed out that due to short-term disturbances at the end of the year, market interest rates have risen recently, reflecting the increase in institutional demand for short-term funds for the new year, but the overall market interest rate has remained stable (market interest rates fluctuate around the reverse repurchase policy interest rate). The market unanimously expects the central bank to take care of funding , For two consecutive days, the central bank’s parity increase and the reverse repurchase scale, and market interest rates have dropped significantly, reflecting the stabilization of market funds.
“It can be seen that although the price of funds has also risen recently in the new year, the magnitude is significantly smaller than in most previous years.” Talking about the stock market that the industry is concerned about, Wang Hao, a macroeconomic researcher, told a reporter from Beijing Business Daily that in the short term, the currency market Maintaining liquidity, wide volume and low prices, will not have an immediate impact on the stock market. However, as time goes by, the incremental funds will partially flow into the equity market. Maintaining reasonable and abundant liquidity actually provides a financial basis for this year’s A-share trading volume to hit a record high. The impact of liquidity on A-shares in 2022 will also depend on the relative return on capital. If economic growth drives the return on capital of the real economy, capital will also “break out of the virtual and enter the real” to support the development of the real economy.
In response to the trend of subsequent monetary policy, the 2022 Central Bank Work Conference to be held on December 27 set the tone. In 2022, we will adhere to the general tone of the work of seeking progress while maintaining stability, and a prudent monetary policy must be flexible and appropriate. Wang Hao believes that at present, stabilizing growth has become the primary economic goal, and cross-cyclical and counter-cyclical macro-control policies must be organically combined. This means that in 2022, it is still necessary to appropriately use aggregate monetary policy tools such as RRR cuts and interest rate cuts to maintain a stable economic growth rate. At the same time, adjusting the economic structure and promoting the smooth implementation of the “dual-carbon” work requires precise adjustments by structural policy tools. Therefore, the subsequent prudent monetary policy is expected to remain flexible, precise, and reasonably generous in liquidity.
Zhou Maohua said, “From past experience, the central bank will continue to cautiously deal with short-term funding interference factors to ensure that funding is stable across the year; monetary policy adjustments are mainly affected by the macroeconomic situation. In the short term, domestic coordination of epidemic prevention and economic growth, overseas The epidemic is still spreading and other factors, the domestic economy is facing certain downward pressure, and the central bank’s prudent monetary policy is slightly loosened to ensure that the liquidity of the real economy remains reasonably sufficient and to provide support for the further recovery of domestic demand.” However, considering that monetary policy needs to balance multiple goals, Zhou Maohua suggested that subsequent monetary policy requires two combinations: one is the combination of aggregate and structural monetary policy tools; the other is the combination of monetary policy and fiscal and other policy tools.
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