The central bank will inject a net of 390 billion yuan into the open market this week, with 390 billion yuan of reverse repurchase agreements maturing next week
The People's Bank of China conducted a net injection of 390 billion yuan in the open market this week, with 390 billion yuan of reverse repurchase due next week. With the tightening of funds, the People's Bank of China increased liquidity injection. This week, a total of 398 billion yuan of 7-day reverse repurchase operations were conducted, achieving a net fund injection of 390 billion yuan. The MLF rate was unchanged this week, with the one-year MLF operation rate remaining at 2.5%, withdrawing a net of 55 billion yuan. Next week, there will be 398 billion yuan of 7-day reverse repurchase due
At the midpoint of the month, with the tax period approaching and the end of the half-year nearing, the recent trend of tightening liquidity has intensified. In order to maintain reasonable and adequate liquidity in the banking system, the central bank increased liquidity injections this week.
This week, the central bank conducted a total of 398 billion yuan of 7-day reverse repurchase operations. Due to 80 billion yuan of 7-day reverse repurchase maturing this week, the net fund injection for the week amounted to 390 billion yuan.
Details of the reverse repurchase operations and maturing amounts for this week are as follows: (unit: billion yuan)
However, this week the Medium-term Lending Facility (MLF) did not see an interest rate cut. On June 17th, the central bank conducted 182 billion yuan of one-year MLF operations at a stable rate of 2.5%. With 237 billion yuan of one-year MLF maturing on the same day, the net fund withdrawal from this MLF operation was 55 billion yuan.
Wang Qing, Chief Macro Analyst at Orient Securities, pointed out that the reduction in MLF scale this month, amounting to 55 billion yuan, was due to factors such as weak credit demand and financial "squeezing out liquidity". Recently, the pace of bank credit extension has slowed down, leading to relatively ample liquidity in the banking system and lower demand from commercial banks for MLF operations. Currently, at a critical stage of the macroeconomic recovery process, it is still necessary for monetary policy to effectively play a countercyclical role. Therefore, the recent reduction in MLF scale should not be overly interpreted, as it does not indicate a signal of policy tightening.
Next week, there will be 398 billion yuan of 7-day reverse repurchase maturing, with maturities of 40 billion, 860 billion, 2780 billion, 200 billion, and 100 billion yuan from Monday to Friday.
Details of the upcoming maturing amounts in the open market operations of the central bank next week are as follows: (unit: billion yuan)
