The central bank attaches importance to liquidity expectations management

Securities Times Network June 27th

Trainee reporter Liu Yucheng

On June 27, the central bank issued a notice saying that the fiscal expenditures near the end of the month increased, and the liquidity of the banking system after the hedging of the central bank's reverse repurchase was at a high level, and no open market operations were carried out. On the same day, there were 10 billion yuan of 7-day reverse repurchase due, so the net withdrawal of funds was realized on the same day. This is the central bank's liquidity recovery from the market on the 5th day after the previous hydration.

Xie Lili, the fixed income department of Nanjing Securities, said that the market funds have been maintained at a high level this month. As of now, the funds are relatively stable, except for the increase in cross-season capital prices.

On the same day, the inter-bank pledged repo rate was mixed, with 11.86 and 1.98 basis points in the 1-day and 14-day periods, respectively, and 1.85 and 35.56 basis points in the 7-day and 21-day periods, respectively. In addition to the two-week variety, Shibor (Shanghai Interbank Offered Rate) fell across the board, with overnight stocks falling 9.1 basis points to 2.6260%, falling for four consecutive trading days.

Near the end of the half year, financial institutions had a consistent expectation of liquidity stability in June, while market concerns about liquidity tensions in July are rising. Li Yong, a fixed-income department of Northeast Securities, believes that the recent tightening of liquidity by the central bank is due to the increase in fiscal quarterly expenditure. In June, liquidity has not been too worried. In addition, the central bank has recently begun to strengthen market expectation management and will maintain a stable neutral. Monetary policy, July funding fabrics will not appear to exceed the expected tension.

The reporter noted that in late May, in order to alleviate the market's worries about the funds in June, the central bank announced the plan in advance through the media. At the symposium on the self-regulatory mechanism on May 25, the central bank said that it has been concerned about the market's worries about the funds at the end of the half year. Considering that there are many factors affecting liquidity in June, it is planned to start MLF operations in early June and start the machine. The 28-day reverse repurchase operation, with good inter-season funding, kept the liquidity basically stable.

On June 26, Yi Gang, deputy governor of the central bank, said in the ninth round of Sino-US business leaders and former senior officials that monetary policy is facing a balance between steady growth and risk prevention, especially to deal with potential risks in terms of leverage. Leverage is first of all a stable lever, and the initial growth has been achieved by reducing the growth rate of leverage.

The CITIC Securities research report said that the central bank is currently holding a steady attitude toward deleveraging, which has somewhat alleviated the market's tight anxiety expectations for the second half of the regulatory policy. The central bank is still likely to maintain a small net investment in July to deal with the tax pressure at the beginning of the season. Historically, the central bank has adopted a net currency operation in early July, and liquidity is expected to remain stable and there will be no excessive tension.

(Securities Times News Center)