Original title: Maintaining stable liquidity, the central bank re-launched 50 billion yuan reverse repurchase
The People’s Bank of China announced on November 17 that in order to maintain a reasonable and sufficient liquidity in the banking system, it has carried out a 50 billion yuan reverse repurchase operation by way of interest rate bidding. On the 17th, 100 billion yuan of reverse repurchases expired, and the People’s Bank of China achieved a net return of 50 billion yuan. Since November, the central bank has gradually increased its reverse repurchase operations to maintain stable market liquidity.
It is worth noting that on November 15, the central bank launched a 1 trillion yuan medium-term lending facility (MLF) operation, with an interest rate of 2.95%, the same as in October. This month is the third consecutive month of high-volume continuation of the MLF, reflecting the monetary authorities’ timely replenishment of medium and long-term liquidity to fully meet the needs of financial institutions and prepare for the upcoming peak issuance of new local government special bonds.
The fourth quarter was considered by many market participants to be a sensitive period of monetary policy. Sun Guofeng, Director of the Monetary Policy Department of the Central Bank, once stated at a press conference in the third quarter that in the fourth quarter, the supply and demand of liquidity in the banking system will continue to maintain a basic balance, and there will be no major fluctuations.
Sun Guofeng said that the People’s Bank of China will comprehensively consider the liquidity situation and the needs of financial institutions, and flexibly use various monetary policy tools such as MLF and open market operations, timely and appropriately release liquidity with different maturities, smooth out short-term fluctuations, and meet the reasonable needs of financial institutions. Financial needs. At the same time, the implementation of structural monetary policy tools will also play a certain role in increasing the total amount of liquidity.
“The People’s Bank of China will continue to pay close attention to the various factors that affect the supply and demand of liquidity, maintain reasonable and sufficient liquidity, and guide the money market interest rate to run smoothly around the central bank’s open market operation interest rate, so as to provide a good liquidity environment for high-quality economic development.” Sun Guofeng Say.
Looking forward to the future, Zhang Xu, chief analyst of fixed income at Everbright Securities, said in an interview with a reporter from the Economic Information Daily that under the policy orientation of “stable word at the head”, the central bank will not be an empty talk to maintain reasonable and abundant liquidity. Moreover, in the international context of the Fed’s policy adjustments, the Central Bank of China will also strive to maintain the smooth operation of financial markets, including the treasury bond market.
Wang Qing, chief macro analyst at Oriental Jincheng, said that in the face of increased liquidity volatility and rising demand for stable growth before the end of the year, if purely from the perspective of liquidity management, the central bank will gradually increase the scale of reverse repurchase operations before the end of the year. And if you continue to do MLF with a moderate increase, you can deal with all kinds of liquidity disturbances; if you take into account the liquidity management, focus on releasing the signal of moderate and stable growth, promote the faster recovery of credit and social financing, and guide the financing cost of the real economy Downside, the central bank may also implement RRR cuts again before the end of the year.
Zhang Xu said that financial institutions should now be guided to continue to use the RRR cut funds instead of reducing the RRR again. He believes that the RRR cut has been given too much symbolic meaning by some investors and paid too much attention. In fact, the RRR cut, like open market operations and MLF, is a tool for the central bank to regulate the liquidity of the banking system, and its purpose is all It is to guide market interest rates to fluctuate around policy interest rates. “When conducting analysis and research, we should focus on policy interest rates and important market interest rates such as DR007. There is no need to worry about which tool is used.”
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