Reverse repurchase returns to the tens of billions of levels The central bank has returned liquidity in a timely manner

After the Spring Festival holiday, the amount of reverse repurchase operations of the central bank returned to the level of tens of billions. On February 10, the central bank launched a reverse repurchase operation of 20 billion yuan, which is also the fourth consecutive day after the holiday that the central bank has carried out a reverse repurchase of 20 billion yuan, and the market funds continue to return net. After a rate cut in January, this year's liquidity trend has attracted much attention. In the view of analysts, the central bank carries out reverse repurchase operations of different scales in a timely manner according to market demand, reflecting the improvement of the central bank's ability and willingness to temporarily adjust liquidity. With reasonable and abundant market liquidity and stable economic development, interest rates may still be lowered.

The net return of 180 billion yuan in a single day

After the market funds smoothly crossed the festival, the central bank reduced the amount of reverse repurchase operations. According to the announcement issued by the central bank on February 10, in order to maintain the reasonable and sufficient liquidity of the banking system, the central bank carried out a reverse repurchase operation of 20 billion yuan in the form of interest rate bidding, with a term of 7 days and a winning interest rate of 2.1%. In view of the expiration of 200 billion yuan of reverse repurchase on February 10, the central bank achieved a net withdrawal of 180 billion yuan in a single day.

The reporter further combed and found that the central bank launched a 14-day reverse repurchase in the week before the Spring Festival, and successively carried out reverse repurchase operations ranging from 100 billion to 200 billion yuan. In the four working days after the Spring Festival holiday, the central bank carried out a reverse repurchase of 20 billion yuan in a row, and the funds invested before the holiday were gradually returned in large quantities.

However, from the perspective of capital performance, the large net return that continued after the holiday has limited disturbance to the capital surface. The data shows that on February 10, all kinds of Shanghai interbank offered rate (Shibor) went down. Overnight Shibor fell 31.6 basis points at 1.728% and 7.7 basis points to 2.01% for the 7-day Shibor.

In addition, from the performance of the repo rate, the more representative 7-day repo rate in the interbank market (i.e. "DR007") fell to 1.9886%, which is lower than the policy rate level.

For the post-holiday central bank contraction operation reverse repurchase of this situation, Everbright Bank financial market analyst Zhou Maohua pointed out that the post-holiday central bank operation is in line with the experience of previous years, mainly due to short-term factors such as festivals and tax periods before the holiday, the market demand for funds is large, the central bank increases the intensity of open market operations, moderately increases liquidity investment, and ensures that the capital surface is stable across the festival. However, with the fading of short-term factors such as festivals, the changes in the hands of financial institutions are abundant, and the central bank moderately adjusts the open market operation and moderately carries out "recovery".

"The central bank will maintain reasonable and abundant liquidity, not only to prevent the market from being short of money, but also to avoid excessive easing of market funds, and through a variety of tools and flexible operations in the open market, the market interest rate will fluctuate near the policy interest rate." Zhou Maohua explained.

Tao Jin, deputy director of the Macroeconomic Research Center of Suning Institute of Finance, also said that the demand for cash after the holiday fell, the liquidity pressure of the banking system was reduced, and the central bank returned liquidity in a timely manner. After the holiday, DR007 is still falling back from the relatively tight pre-holiday liquidity, and the february 10 quotation has been significantly lower than the reverse repo rate, which also reflects the improvement of the central bank's ability and willingness to adjust temporary liquidity.

There is still room for rate cuts

It is worth mentioning that in January 2022, the central bank successively lowered the 7-day reverse repo rate, the 14-day reverse repo rate and the standing lending facility (SLF) interest rate for each period, etc., and the 1-year LPR was lowered for two consecutive months, and the LPR above the 5-year period also fell by 5 basis points.

Interest rate cuts are superimposed on the open market operation of 100 billion yuan, and the central bank's intention to protect market liquidity is obvious. When talking about whether there is still room for interest rates to be reduced, Zhou Maohua said that domestic epidemic prevention and economic recovery are ahead of developed economies, the economic and financial structure continues to be optimized, prices are stable, financial institutions are stable, monetary policy remains independent, policy space is sufficient, and there is still room for interest rate reduction. However, whether to further reduce interest rates and when to reduce interest rates still needs to pay attention to macroeconomic and inflation development trends, to pay attention to the recovery of real credit demand and domestic demand, and whether there is a risk of the economy deviating from a reasonable range.

"From the beginning of 2022 to the first half of 2022, the 'wide currency, wide credit' under the stable growth policy will gradually appear." In the future, the policy focus will shift to broad credit, guide aggregate and structural credit expansion, and there is also room for small interest rate cuts to completely reverse expectations. At the same time, the downward pressure on the economy still exists, and in the case of fiscal policy, the financing interest rate of the real economy has upward pressure, which requires the cooperation of monetary policy. Tawkin thinks.

Tao Jin further added that in the second half of 2022, the downstream inflation rate may pick up under the influence of low base and pig cycle recovery. Monetary policy could return to neutrality due to the increased need for risk prevention brought about by monetary and credit easing. This also requires monetary policy to grasp the timeliness and effectiveness, especially in the first half of the year should be strengthened in a timely manner.

Looking forward to the liquidity trend in 2022, Zhou Maohua stressed that the future liquidity is still expected to maintain a reasonable and sufficient pattern. Mainly due to the complex global epidemic prevention and economic recovery environment, the mainland is facing downward pressure on the new economy, the domestic monetary policy is slightly loose, and the fiscal and other policies have formed a synergy to bail out enterprises, guide financial institutions to increase support for small and micro enterprises, manufacturing key emerging areas, stimulate the vitality of micro subjects, and support the steady recovery of domestic demand. (Yue Pinyu, Liao Meng)