Sino-Singapore Jingwei Client, September 25, according to the announcement on the official website of the Central Bank, in order to maintain stable liquidity at the end of the quarter, the People's Bank of China launched a 90 billion yuan reverse repurchase operation on September 25, 2020 through an interest rate bidding method.

　　Screenshot source: the official website of the central bank

　　Wind data shows that the central bank has carried out a total of 900 billion yuan of reverse repurchase operations this week. Because of the 420 billion yuan of reverse repurchase expiration this week, the central bank realized a net investment of 480 billion yuan this week.

　　Screenshot source: Wind

　　According to data from the China Foreign Exchange Trading Center, on September 25, the central parity of the RMB against the US dollar depreciated by 93 basis points to 6.8121.

On the previous trading day, the central parity of RMB against the US dollar was reported at 6.8028, the closing price at 16:30 was at 6.8240, and the closing price at 23:30 was at 6.8275.

　　CICC recently issued a research report saying that the central bank's 14-day reverse repurchase was designed to stabilize cross-season and cross-section disturbances.

CICC stated that in the follow-up, as the supply pressure superimposed on the easing of the pressure on bank structural deposits in the fourth quarter, the capital situation is expected to improve further.

As the central bank maintains a flexible and appropriate open market operation, it will continue to increase the release of structural tools at special time points such as the middle of the month and the end of the quarter to smooth out the disturbance of funds and guide the money market interest rate to move closer to the OMO operating interest rate.

　　CICC believes that at present, the short-end overnight and 7-day repurchase rates have basically returned to the central bank's acceptable level, while the longer-end money market interest rate, the issuance rate of the 1-year interbank deposit certificate of China National Stock Exchange, has basically returned to Around 2.95%-3%, it is the same as the 1Y MLF interest rate.

　　It is worth mentioning that at the end of May, the RMB exchange rate against the US dollar rebounded after falling below 7.2 yuan. In mid-September, it broke 6.8 yuan and rose to around 6.75 yuan.

On September 25, the central parity of the RMB against the U.S. dollar depreciated by 93 basis points, falling for five consecutive days.

　　China Securities News wrote an article that as the US dollar index fluctuates, the RMB exchange rate will return to a fundamental-led pattern, reflecting more changes in economic fundamentals.

The article pointed out that this round of RMB appreciation is also strongly supported by other factors.

The first is that my country adheres to the implementation of normal monetary policy, and the interest rate differential between China and foreign countries is at a relatively high level. Due to the positive economic performance, the level of interest rate differentials is difficult to significantly reduce, and my country's assets are very attractive to foreign capital.

(Zhongxin Jingwei APP)