Sino-Singapore Jingwei Client, May 28, announced 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 10 billion yuan reverse repurchase operation on May 28, 2021 through an interest rate tender.

　　Screenshot source: the official website of the central bank

　　Wind data shows that this week (May 24 to May 28), the central bank has carried out a total of 50 billion yuan of reverse repurchase, 50 billion yuan of reverse repurchase expires, and this week achieved zero investment and zero return.

　　The Sino-Singapore Jingwei client combed and found that since this year, the central bank has continuously carried out reverse repurchase operations for 100 consecutive trading days. Since March 1, it has only invested 10 billion yuan of reverse repurchase operations per day for 63 consecutive trading days.

　　Chuancai Securities’ research report on May 27 pointed out that, reviewing financial data in April, medium and long-term loans to the real economy maintained a year-on-year increase, but the growth rate was only 15.97%, and the growth rate was significantly narrowed.

The weakening of financing demand is one of the important reasons for the current stability and looseness of inter-bank liquidity.

　　Looking forward to June, CITIC Securities analyst Mingming and others issued a document on the 28th and pointed out that the liquidity pressure is expected to be temporarily suspended in June, but it is difficult to see substantial easing of funds.

The pace of local special bond issuance has slowed down significantly compared with previous years. It is expected that there will be little pressure on government bond supply in June; public fiscal expenditures are expected to accelerate marginally, and the overall "expenditure and revenue will be less"; open market operation tools have less maturity and monetary policy remains stable , It is difficult to turn loose.

The renminbi is expected to continue to appreciate, which may lead to an increase in foreign exchange holdings, but the overall impact on inter-bank liquidity is limited.

On the whole, liquidity pressure will appear more in the third quarter or the end of June. It is expected that the overall pressure in June will be temporarily suspended but it is hard to say easing.

(Zhongxin Jingwei APP)