People’s Daily Online, Beijing, November 16 (Huang Sheng) According to the People’s Bank of China (hereinafter referred to as the “Central Bank”), in order to maintain reasonable and sufficient liquidity in the banking system, the central bank launched a 100 billion yuan MLF (medium-term lending facility) operation on November 15 (Including the sequel to the two MLF maturities on November 16 and 30), the winning bid rate was 2.95%, consistent with the previous one; in addition, the central bank launched a 7-day reverse repurchase operation of 10 billion yuan, and the winning bid rate was 2.2% , Fully meet the needs of financial institutions.
According to data from the central bank, 800 billion yuan and 200 billion yuan MLF expired on November 16 and 30, respectively, for a total of 1 trillion yuan. The implementation of the 1 trillion MLF operation this time is the third consecutive month that the central bank has implemented MLF equivalence continuation. In this regard, many market participants told People’s Daily Online that, except for July and August after the RRR cut, the monthly MLF operation volume is roughly the same as the maturity volume, reflecting the characteristics of robust and moderate monetary policy operations.
In this regard, Wang Qing, chief macro analyst at Oriental Jincheng, said that after the central bank’s RRR cut in July, the medium-term liquidity of the banking system has shown a loose state, represented by the maturity rate of 1-year commercial bank (AAA) interbank certificates of deposit. The mid-market interest rate is about 20 basis points lower than the medium-term policy interest rate (MLF interest rate). In this context, the central bank chose to continue the MLF in November, which will help commercial banks cope with the upcoming peak issuance of new local government special bonds and avoid higher-than-expected increases in market interest rates. This reflects the coordination between monetary policy and fiscal policy and helps create a more favorable monetary and financial environment for stable growth in the fourth quarter.
Sun Guofeng, Director of the Monetary Policy Department of the Central Bank, said a few days ago that the central bank will comprehensively consider liquidity conditions, financial institution needs, etc., with regard to government bond issuance, tax payment and MLF maturity and other phased influencing factors, and flexibly use MLF, open market operations, etc. Monetary policy tools, timely and appropriate release of liquidity of different periods, smoothing short-term fluctuations, meeting the reasonable funding needs of financial institutions, and maintaining reasonable and sufficient liquidity.
“In the fourth quarter, the liquidity supply and demand in the banking system will continue to maintain a basic balance, and there will be no major fluctuations.” Sun Guofeng said that the implementation of structural monetary policy tools will also play a role in increasing the total amount of liquidity.
The Central Bank also analyzed the next stage of monetary policy at the meeting to study the spirit of the Sixth Plenary Session of the 19th Central Committee of the Party held a few days ago. The central bank stated that it will adhere to a prudent monetary policy, do a good job of cross-cycle design, and make overall consideration of policy convergence this year and the next to better support the recovery of consumption and investment, curb excessive price increases, and promote high-quality economic and social development. In addition, we will innovate monetary policy tools to guide financial institutions to increase support for small and micro enterprises, green development, technological innovation, rural revitalization, and regional coordinated development to promote common prosperity.Return to Sohu to see more
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