Original title: The central bank’s reverse repurchase operations continue to increase the volume to maintain a reasonable and sufficient liquidity
On November 9, the People’s Bank of China launched a 100 billion yuan reverse repurchase operation by way of interest rate bidding, and the winning interest rate was 2.20%. From 10 billion, to 50 billion, and then to 100 billion, since November, the central bank’s open market reverse repurchase has continued to increase recently. Industry insiders said that demand for market liquidity rose in November, and the central bank made reasonable supplements through open market operations. The scale of reverse repurchase operations may still increase before the end of the year.
“In November, DR007 (the repurchase rate of deposit financial institutions in the inter-bank market) did not fall sharply at the beginning of the month like other months before, reflecting the overall tightness of funds during this period.” Chief Macro Analyst of Oriental Jincheng Wang Qing said that the central bank’s continuous increase in reverse repurchase volume has changed the previous month’s usual practice of implementing reverse repurchase of 10 billion per trading day during this period, indicating that the central bank is using open market operations to fine-tune to maintain reasonable and adequate market liquidity. , To avoid higher-than-expected upward market interest rates.
Liang Si, a researcher at the Bank of China Research Institute, said that there are two main reasons for the increase in reverse repurchase operations in November compared with the previous ones: First, special bonds will be issued in a concentrated manner this month. According to the requirements of the Ministry of Finance of the Ministry of Finance to “try to complete the issuance of new special bonds before the end of November”, it is estimated that the scale of new special bonds issued in November will reach 906.1 billion yuan, and the demand for market liquidity is expected to rise, and a certain amount needs to be supplemented. The liquidity meets the issuance of special bonds. The second is that the MLF will expire 1 trillion yuan this month, and it is expected that there will be a continuation of the same amount. However, it is also necessary to moderately supplement liquidity to stabilize market expectations.
“In addition to the’Double 11′ approaching, the concentrated release of consumer demand by residents may result in the transformation of banking system funds into payment institutions’ reserve funds in the central bank, which in turn will consume the base currency to a certain extent, requiring the central bank to take precautions to maintain a certain amount of liquidity. It also reflects the refined control thinking of monetary policy.” said Wang Yifeng, chief analyst of the financial industry of Everbright Securities.
Liang Si said that near the end of the year, it is expected that the tone of monetary policy and the mode of operation will not change. In the short term, it will still be based on market liquidity requirements, combined with the issuance of special bonds, fiscal expenditures, and tax payment to maintain a reasonable and sufficient liquidity.
Wang Yifeng said that monetary policy will place more emphasis on the principle of inter-cyclical control, balance the short-term goals and long-term goals, and focus on assessing the overall macroeconomic situation from a medium- to long-term perspective. The most direct manifestation is that macro-control policies will not be “open.” In the situation of “Great Cooperation”, the decision-makers will cherish the normal monetary policy space even more and have strong policy determination on traditional tools such as RRR cuts and interest rate cuts.
Looking forward to next year, Liang Si said that the tone of monetary policy will still be prudent. On the one hand, to ensure that the financial data is basically stable, and to ensure that the overall financial support is not reduced. At the same time, we will strengthen the application of structural monetary policy tools, continue to increase support for small and micro, green and other fields, and improve policy accuracy. On the other hand, we need to be wary of the impact of the Fed’s reduction of bond purchases. Pay close attention to changes in the rate of return on US dollar assets and global cross-border capital flows, and respond to risks.
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