Sino-Singapore Jingwei Client announced on November 10 on the official website of the Central Bank that in order to maintain a reasonable and sufficient liquidity in the banking system, the People's Bank of China launched a reverse repurchase operation of 120 billion yuan on November 10, 2020 through an interest rate bidding method.
Screenshot source: central bank website
Due to the expiration of 120 billion yuan of reverse repurchase today, zero investment and zero return were achieved today.
Wind data shows that a total of 600 billion yuan of MLF expired in November, among which 400 billion yuan of MLF expired on November 5 and 200 billion yuan of MLF expired on November 15.
In addition, the central bank’s official website announced on the 5th that the People’s Bank of China will renew the mid-term loan facility (MLF) due this month on November 16, and the specific operation amount will be determined based on market demand and other conditions.
According to data from the China Foreign Exchange Trade Center, on November 10, the central parity of RMB against the US dollar was reported at 6.5897, an increase of 226 basis points; the central parity of the previous trading day was reported at 6.6123, and the closing price of onshore RMB at 16:30 was reported at 6.5728 at 23:30. The market closed at 6.5990.
It is worth noting that on November 9, the onshore RMB exchange rate against the US dollar rose above the 6.6 mark, the first time since the end of June 2018.
China Securities Journal reported that analysts believe that from the current situation, there is a possibility of relaxation in the external environment, the Fed's monetary policy may continue to be loose, the dollar index will fall further, and there is room for appreciation of the renminbi.
On November 9, Shibor short-end varieties went online.
Overnight varieties reported up 40.3bp at 2.193%, 7-day up 5.7bp at 2.272%, 14-day up 18.2bp at 2.379%, and 1-month up 0.6bp at 2.646%.
Huaan Securities pointed out that in terms of open market operations, a total of 1.215 billion yuan of liquidity was withdrawn due in November, a slight increase from October. It is expected that the central bank will adopt corresponding hedging tools in November to continue to maintain reasonable and sufficient liquidity.
Huaan Securities said that considering all factors, liquidity is expected to be slightly loose in November relative to October. The central bank will adhere to the appropriate aggregate policy and maintain a reasonable and sufficient level of liquidity.
(Zhongxin Jingwei APP)