China-Singapore Jingwei Client, October 15th. The central bank announced on the morning of the 15th that in order to maintain a reasonable and sufficient liquidity in the banking system, it has carried out a 500 billion yuan medium-term loan facility (MLF) operation (including the MLF expired on October 16 Continued), and 50 billion yuan reverse repurchase operations.
Among them, the one-year MLF winning bid rate was 2.95%, and the 7-day reverse repurchase winning bid rate was 2.20%, both remained unchanged.
Data show that 200 billion MLF expires in October; today (15th) the non-reverse repurchase expires.
Source: Central Bank website
By convention, the central bank will carry out the Mid-term Lending Facility (MLF) operation on the 15th of each month.
In August and September of this year, the central bank carried out excessive continuation of expired MLF, especially on September 15th, the central bank carried out 600 billion MLF operations to hedge the 200 billion MLF that expired on September 17 and achieved the excess Invest 400 billion yuan.
Not only that, on September 15th, the central bank did not carry out reverse repurchase operations, and over the same period, 170 billion yuan of reverse repurchases expired in 7 days.
The industry generally believes that the central bank over-renewed the MLF for two consecutive months, aimed at alleviating the banks' tight medium and long-term liquidity needs.
It is worth noting that today's reverse repurchase is also the first operation of the central bank in October.
Compared with the “high-density” operation in September, the central bank’s open market operations continued to “empty windows” in October. Within the five working days as of October 14, the central bank announced that the current total liquidity in the banking system At a reasonable and sufficient level, no reverse repurchase operations will be carried out.
According to the China Securities Journal citing industry insiders, after the MLF operation, this month's method of further hedging the impact of the tax period and government bond payments is mainly to carry out reverse repurchase operations, which may be concentrated in the second half of the time.
First, local bond issuance may be relatively concentrated, and second, the tax period peak is expected to occur around the 23rd, when short-term liquidity demand will rise.
In terms of funding in October, the team of chief fixed income analyst at CITIC Securities pointed out that it is expected that the funding will remain neutral in October, but there may be disturbances on the margins.
According to the team, firstly, the pressure on the supply of government bonds in October will still exist, and the pace of fiscal expenditure will also slow down. It is expected that fiscal funds will settle, and the total amount of inter-bank liquidity may maintain a tight balance; secondly, the open market will arrive in October. There is little pressure in the period, and the central bank’s OMO supply may increase.
It is expected that in October, liquidity will face the triple pressure of "low and excess reserves + fiscal pressure + structural deposit pressure drop", and the active monetary policy or the biggest variable does not rule out the possibility of the central bank's RRR cut.
At the third quarter financial statistics press conference held by the Central Bank on September 14, in response to the "future interest rate cuts and RRR cuts," Sun Guofeng, Director of the Central Bank’s Monetary Policy Department, stated that interest rates generally match the current economic fundamentals. In the phase, a variety of monetary policy tools will be comprehensively used in accordance with changes in the situation to maintain reasonable and sufficient liquidity and support the reasonable growth of money supply and social financing. (Zhongxin Jingwei APP)