The central bank launched a 160 billion reverse repurchase agency on the 13th: November monetary policy will remain neutral

　　China-Singapore Jingwei Client reported on the official website of the Central Bank on November 13 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 160 billion yuan on November 13, 2020 through interest rate bidding.

　　Screenshot source: central bank website

　　Screenshot source: Wind

　　Wind data shows that this week, the central bank’s open market has 320 billion yuan of reverse repurchase due, and a total of 550 billion yuan of reverse repurchase operations have been carried out, so a net investment of 230 billion yuan this week.

　　On November 11, the Central Bank announced the "Report on Financial Statistics for October 2020", showing that at the end of October, the balance of broad money (M2) was 214.97 trillion yuan, a year-on-year increase of 10.5%, and the growth rate was 0.4 percentage points lower than the end of the previous month. A year-on-year increase of 2.1 percentage points; the balance of narrow money (M1) was 60.92 trillion yuan, a year-on-year increase of 9.1%, and the growth rate was 1 and 5.8 percentage points higher than the end of last month and the same period of the previous year; the balance of currency in circulation (M0) was 81,000 Billion, an increase of 10.4% year-on-year.

Net cash returned in the month was 133.4 billion yuan.

　　According to a research report issued by Northeast Securities, last Friday (November 6), the central bank proposed to adjust the policies introduced during the special period in a timely and appropriate manner, triggering market concerns about further tightening of monetary policy in the future.

But

for now, the future monetary policy more performance for the neutral, stable interest rates and a slowdown in credit policy mix

.

The introduction of the special period policy may be mainly reflected in the deferred debt and interest payment for small, medium and micro enterprises, the two direct instruments of inclusive small and micro credit loans, and the reduction of fees and other financial concession measures.

　　Soochow Securities also said that overall, the net investment in October was 40 billion yuan.

Looking to the later period, it is judged that the monetary policy in November will remain neutral.

Soochow Securities pointed out that Yi Gang stated at the Financial Street Forum on October 21, “Keep the money supply basically matching the growth rate of nominal GDP reflecting potential output. Implement normal monetary policy for as long as possible and maintain normal , An upward sloping yield curve. Monetary policy needs to properly control the total gate of the money supply and appropriately smooth the fluctuations of the macro-leverage rate to maintain it on a reasonable track for a long time.” This is the first time since August 2019 that the central bank has re-raised "Keep the total gate and maintain a normal upward sloping yield curve."

In summary, the monetary policy is expected to remain neutral until the first half of next year.

　　In addition, recently, the National Bureau of Statistics released data showing that the CPI rose 0.5% year-on-year in October, returning to within "1" after 42 months.

Whether prices continue to fall will affect the trend of monetary policy has become the focus of attention.

　　Wen Bin, chief researcher of China Minsheng Bank, believes that, on the whole, the CPI has risen by 3% year-on-year in the first 10 months and has fallen back to the 3.5% annual control target.

In the next stage, as the CPI base continues to rise in the same period last year, the supply of pork and other foods continues to improve, supply and demand are expected to remain balanced, and the CPI center will continue to fall.

However, the international oil price volatility has intensified, the recovery of corporate profits has been slow, and it will take time for the PPI growth rate to change from a decline to an increase.

As a result,

inflation will basically not constitute a constraint on monetary policy. Monetary policy needs to focus on precise guidance, maintain reasonable and sufficient liquidity, and

increase precise support for key areas and weak links through structural policies to promote accelerated recovery of demand and promote The confidence of market players has improved and production and operation have been accelerated.

(Zhongxin Jingwei APP)