China News Service, Beijing, January 29 (Reporter Xia Bin) The Central Bank of China issued an announcement on the 29th: In order to maintain stable liquidity at the end of the month, it launched a 500 billion yuan (RMB, the same below) 7-day reverse repurchase operation through interest rate bidding. , the winning bid rate is 1.80%, the same as before.
As 122 billion yuan of seven-day reverse repos expired on the 29th, the open market achieved a net investment of 378 billion yuan.
This is another recent move by the People's Bank of China to maintain market liquidity. The central bank announced last week that it would lower the deposit reserve ratio for financial institutions by 0.5 percentage points starting from February 5.
Zhang Yu, deputy director and chief macro analyst of Huachuang Securities Research Institute, pointed out that from September to November 2023, the average monthly funds invested by the central bank remained near the highest value in the past five years. However, its methods mainly use short-duration reverse repurchases (mainly 7 days) and one-year MLF (medium-term lending facilities), and do not use longer-duration PSL (collateralized supplementary loans) and RRR cuts.
Zhang Yu said that since December last year, the release of PSL has been combined with the latest RRR cut, and the funds invested by the central bank have been marginally extended in term, especially considering that the RRR cut provides zero-cost funds. Therefore, compared with the second half of 2023, The stability of inter-bank interest rates may improve in the short term, and the probability of a sharp surge in inter-bank interest rates is marginally reduced.
Li Zhan, chief economist of the China Merchants Fund Research Department, also mentioned that on the one hand, the scale of cash withdrawals during the Spring Festival over the years has been about 1.5 trillion yuan, on the other hand, the base currency gap since 2023 has continued to be filled by MLF and reverse repos. This RRR cut will help protect the New Year's Eve funding and fill the long-term funding gap.
The fixed income research team of Zheshang Securities believes that in terms of seasonal patterns, the absolute level of capital interest rates tends to rise in the two weeks before the Spring Festival, and there are opportunities to ease the capital situation in the two weeks after the Spring Festival. At present, according to seasonal patterns, funding rates are expected to still tend to rise. (over)