According to Wind data, 487 billion yuan of reverse repos expired that day, so a net withdrawal of 187 billion yuan was made in a single day, ending five consecutive days of net investment.
According to data from the China Foreign Exchange Trading Center, on February 23, the central parity rate of RMB against the US dollar was reported at 6.9028, a depreciation of 269 basis points. The middle price of the previous trading day was 6.8759, the closing price of onshore RMB was 6.8953 at 16:30, and 6.8912 at night.
The central bank announced that in order to maintain stable liquidity at the end of the month, on February 23, a 300 billion yuan 7-day reverse repurchase operation was carried out by means of interest rate bidding, with a winning bid rate of 2.0%.
According to Wind data, 487 billion yuan of reverse repos expired that day, so a net withdrawal of 187 billion yuan was made in a single day, ending five consecutive days of net investment.
In addition, the central bank and the Ministry of Finance will conduct a one-month 50 billion yuan treasury cash deposit tender on Thursday (February 23) to inject liquidity into the market.
Wind data shows that it has been half a year since the last treasury cash fixed deposit bidding, and the last treasury cash fixed deposit operation was carried out on August 24, 2022.
The US dollar index rose significantly on the 22nd. The U.S. dollar index , which measures the greenback against six major currencies, rose 0.39% on the day to close at 104.5801 in late trading.
On February 22 local time, the Federal Reserve released the minutes of the Federal Open Market Committee (FOMC) monetary policy meeting from January 31 to February 1. According to the release of the minutes of the meeting, the Fed said that while there were signs that inflation was falling, it was not enough to offset the need for further rate hikes and that inflation was “remaining well above” the Fed’s 2% target. It follows that “the labor market remains very tight, leading to continued upward pressure on wages and prices.” As a result, the Fed decided to raise the target range for the federal funds rate by 25 basis points, the smallest increase since March 2022 amplitude. According to the minutes of the meeting, almost all participants supported the decision and agreed to continue to raise interest rates until inflation is under control.
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