Financial Services Association, December 23 (Reporter Cao Yunyi) As the end of the year approaches, the central bank's open market operations have intensified. The weekly reverse repurchase matured at 1678.3 billion yuan this week. The maturity scale was large and mainly concentrated in the first three days. In addition, the central bank launched an MLF renewal on the 25th, and the market is concerned about financial fluctuations on New Year's Eve.

Regarding future liquidity prospects, industry experts told the Financial Federation reporter that the central bank has no intention of excessively easing capital, but rather maintains an overall reasonable balance, and is concerned about whether the central bank will launch a downgrade operation before and after the MLF is renewed during the statistical period. At the same time, the market believes that even if New Year's Eve disrupts capital, the impact may be limited in the end, and capital volatility at the end of the year may be less than in previous years.

The central bank properly cares for liquidity and has no intention of excessive easing

Today, the central bank's open market launched a 7-day reverse repurchase operation of 109.6 billion yuan, with an operating interest rate of 1.50%. Due to the expiration of the reverse repurchase of 753.1 billion yuan today, a net return of 643.5 billion yuan was achieved on the same day.

Combined with market interest rates, liquidity changed from tight to loose after the tax period. DR007 (the weighted average interest rate for 7-day repurchases of deposit institutions in the interbank market) has continued to decline since December 17. As of last Friday, the Shanghai Interbank Offered Rate (Shibor) fell by 1 basis point overnight to 1.414%, and the 7-day Shibor fell 0.7 basis points to 1.62%. Judging from the repurchase interest rate performance, the DR007 weighted average interest rate fell to 1.5713%, which is higher than the policy interest rate level. The reverse 1-day treasury repurchase rate (GC001) on the Shanghai Stock Exchange rose to 1.645%.

Zhou Maohua, a macro researcher at the Financial Markets Department of Everbright Bank, said that the DR007 downturn is mainly due to the recent increase in the central bank's open market operations, compounded by the seasonal decline in bank credit investment at the end of the year, and fiscal capital investment, and market liquidity remained reasonably relaxed.

The full-week reverse repurchase matured at 1678.3 billion yuan this week. The maturity scale is quite large. 1.5 trillion yuan will expire in the first three days of this week, and the central bank will launch an MLF renewal on the 25th. In addition, the interbank deposit matured at 712.71 billion yuan, slightly lower than the previous week's 715.16 billion yuan, and the maturity pressure is still high.

Judging from the central bank's market operations, the industry believes that the central bank has no intention of excessively easing capital in the near future, but rather maintains an overall reasonable balance. “Currently, the central bank is biased towards 'caring but has no intention of excessive relaxation' in terms of funding. It is concerned about whether the central bank will launch a downgrade operation before and after the MLF is renewed during the statistical period. The probability of a downgrade in 14 days is still high. Fiscal expenditure is also beneficial to the financial side. Correspondence even if New Year's Eve disrupts capital, the impact may be limited in the end.” Zhejiang Shang Guishou Qin Han's team thinks so.

Focus on the central bank's MLF operations this week, the year-end fluctuation was lower than previous years

Many industry insiders expect that the central bank will reduce the price parity and renew it as MLF, and that New Year's Eve funding will also remain relatively relaxed.

Wang Qing, chief macro analyst at Dongfang Jincheng, told CFA reporters: “This month, the central bank will also launch a large-scale buyout reverse repurchase while downsizing and renewing MLF. On the one hand, this will continue to weaken the MLF operating interest rate policy interest rate; on the other hand, it will also help maintain a reasonable and abundant state of market liquidity.”

Huaxi Securities believes that the financial side is also expected to continue the new “month-end effect,” and there are too many favorable factors. “The central bank may continue to invest capital to care for New Year's Eve. On the 25th, the MLF will continue to refer to the same maturity scale as the previous month, and may also continue to make net purchases of treasury bonds. It is expected to invest a total of nearly 2 trillion yuan in medium- to long-term capital.”

In addition, Huaxi Securities analyst Xiao Jinchuan pointed out that since the issuance of 2 trillion replacement bonds was basically completed before mid-December during the year, it is expected that the vast majority of capital will be released during the year, and the faster replacement process is also beneficial to the financial side. Overall, New Year's Eve funding may remain relatively relaxed.

“Currently, we are in the process of developing a package of incremental policies. The central bank will comprehensively use policy tools such as pledged reverse repurchases, treasury bond transactions, buyout reverse repurchases, MLF renewals in an appropriate amount, and downgrade. The financial volatility at the end of the year will be significantly lower than in previous years. Considering the implementation of interest rate cuts in September, we are currently observing the effects of the policy, and it is unlikely that policy interest rate cuts will be implemented again before the end of the year.” Wang Qing thinks.