After implementing a 7-day reverse repurchase operation of 3 billion yuan for 3 consecutive days, on July 25, the People’s Bank of China (hereinafter referred to as the “central bank”) slightly increased the amount to carry out a 7-day reverse repurchase of 5 billion yuan, and the operating interest rate remained unchanged. 2.1% unchanged. Since 12 billion yuan of reverse repurchase expired on that day, the open market achieved a net withdrawal of 7 billion yuan.
? ? In this regard, Wang Qing, chief macro analyst of Oriental Jincheng, said that near the end of the month, factors such as fiscal revenue and expenditure, bank assessment and other factors will increase the disturbance of market liquidity. During this period, the central bank will mostly increase the volume of reverse repurchase operations to cut peaks and fill valleys. Considering that the current market liquidity is at a relatively sufficient level, the impact of the above factors may be relatively limited, and it is unlikely that the scale of reverse repurchase operations will increase significantly in the later period.
Since July, funds in the inter-bank market have remained loose, and DR007 (7-day pledged repo rate for inter-bank depository financial institutions) has been operating below the 7-day reverse repo rate. According to data from the National Interbank Funding Center, as of 16:00 on July 25, DR007 reported 1.5199%.
It is worth noting that in July, the central bank broke the “inertia” of carrying out 10 billion yuan of reverse repurchase at special time points such as the end of the quarter and the end of the month since last year. In addition to the 10 billion yuan reverse repurchase on July 1 and the 5 billion yuan reverse repurchase on July 25, the central bank launched a 12 billion yuan and 7 billion yuan reverse repurchase operation on July 18 and July 19, respectively. During the rest of the month, 3 billion yuan of reverse repurchase was carried out. Judging from the timing and volume of operations, the central bank’s “fancy” reverse repurchase this month has no obvious rules to follow.
In this regard, Wang Youxin, a senior researcher at the Bank of China Research Institute, told the “Securities Daily” reporter that this shows that the current monetary policy operation is more flexible and precise, with discretionary and refined characteristics. In the context of no obvious changes in economic fundamentals and liquidity environment, the frequency of changes in the scale of reverse repurchase operations has increased recently, changing the previous model of routinely carrying out 10 billion yuan reverse repurchase. The main purpose is to achieve short-term liquidity balance, depending on the market. The operation situation and interest rate changes are flexibly adjusted, peaks are cut and valleys are filled, and the liquidity adjustment method is more accurate. Moreover, with the frequent changes in the scale of operations, its forward-looking significance to the trend of monetary policy is weakened, which is in line with the policy direction of “heavy price not weight” that the central bank has recently emphasized. reflect the direction of monetary policy.
“Since July, the number of adjustments to the scale of the central bank’s reverse repurchase has increased, and the overall level is at the level of ‘land volume’. At the same time, the average value of DR007 since July has not increased but decreased compared with the same period in June, and market liquidity continues to be at a reasonable and sufficient level. Wang Qing said, first of all, this means that the current policy side continues to provide a supportive monetary and financial environment for economic recovery. Secondly, since July, the central bank has broken the previous cycle and rolled out the 10 billion yuan reverse repurchase model, and the scale of the operation has been “shrinked” as a whole, so as to avoid the market’s misconception that liquidity will be excessively loose after the economy has entered the repair process. Finally, the volatility of the global financial market has intensified since July, and there have been some risk events in some domestic areas. The scale of the central bank’s reverse repurchase has been adjusted several times, which also reflects the policy intention of flexible monetary policy response and “walking ahead of the market yield curve”, thereby stabilizing market expectations and consolidating the momentum of economic recovery.
The CITIC Securities Research Report believes that since July, the central bank’s reverse repurchase operations have become more precise and flexible. The scale of the operation has changed from an integer multiple of 10 billion yuan to an integer multiple of 1 billion yuan, and the frequency of changes has increased. A new framework has been adopted for policy operations. The change in the number of reverse repurchase operations under the new framework does not represent a change in monetary policy, but may be just to better achieve short-term (7-day) liquidity equilibrium. Fund prices such as reverse repurchase rate, DR007, MLF rate and LPR are more likely Represents the direction of monetary policy.
However, in Wang Qing’s view, the scale of reverse repurchase has changed many times in July, which more reflects the flexible response of monetary policy to capital situation and market risk sentiment. Whether it means that the operating framework has undergone fundamental adjustment remains to be seen.
Wang Youxin believes that the central bank may continue to adopt a discretionary and flexible operation mode in order to better calm and hedge market fluctuations.Return to Sohu, see more
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