Relatively high level of liquidity reverse repurchase absent for 11 consecutive days

Relatively high level of liquidity reverse repurchase absent for 11 consecutive days

Relatively high level of liquidity reverse repurchase absent from this reporter for 11 consecutive days?

Su Shiyu?

    On April 3, the People’s Bank of China announced that the liquidity of the existing banking system was at a relatively high level, and no reverse repo operation was carried out on that day.

Since March 20, the People’s Bank of China has suspended reverse repurchase operations for 11 consecutive business days.

  Regarding the reasons for the temporary suspension of the reverse repurchase, Wang Qingye, chief macro analyst of Oriental Jincheng, said in an interview with the Securities Daily reporter that the reason why recent progress has continued to suspend reverse repurchase operations in the open market depends only on the currentThe fluctuation range of market interest rates is still within the long-term policy objectives, and the funds as a whole have changed rather than a reasonable and sufficient state.

At the same time, this move in advance also helps prevent market participants from forming an illusion of liquidity.

The market interest rate has continued to be lower than the policy-guided interest rate for some time later, and some financial institutions may form loose unilateral liquidity expectations and relax liquidity risk management.

  Huang Zhilong, director of the Macroeconomic Research Center of Suning Financial Research Institute, told a reporter from the Securities Daily that the temporary suspension of reverse repurchase has always been an early loose monetary policy, releasing liquidity, and recovering liquidity by suspending reverse repurchase is also a reasonable strategy.

In addition, according to the recent budget, the amount of funds due in the open market in advance is not large, and the need for long-term reverse repurchase operations is not great.

At present, the long-term monetary policy will be mainly stable, and at the same time, it will quickly track the current economic situation. It is necessary to ensure a reasonable and sufficient liquidity and prevent “flooding floods”.

  Cao Xiao, director of the Quantitative Finance Research Center of Shanghai University of Finance and Economics, told a reporter from Securities Daily that 北京夜网 the recent decline in interest rates in the currency market is a gradual step back from the repurchase suspension. Due to the overall loosening of monetary policy, the market ‘s short-term liquidity is abundant and market interest ratesThe term structure is also appropriate and reasonable, and it is prudent and appropriate to gradually suspend liquidity investment without adopting the general principle of a “flood flood” policy.

  Cao Xiao said that at present, the transition has adopted the camera alternative operation strategy in the operation of monetary policy, and will continue to suspend reverse repurchase, mainly the overall situation of market interest rates and liquidity. From the current point of view, the reverse reversal has been ruled out.As a result of the termination of hedging by MLF and MLF, as long as the market interest rate does not increase, the reverse repurchase will gradually be suspended.

The reason is that for the purpose of reducing monetary policy and reducing the financing cost of the real economy, the role of open market operations is limited, and the role of gradual reduction of quasi interest rate reduction is more significant. Open market operations can only play a role on the basis of reserve ratios and benchmark interest rates.
  Wang Qing believes that, given the inertia of the liquidity recovery at the beginning of the month, it is possible to gradually suspend reverse repurchase in the short term.

However, on April 17th, 366.5 billion MLF will be terminated, and it overlaps with the peak of the tax period of the current month.

With the current downward pressure on the macro-economy and ample market liquidity, the urgency of gradual reductions in April has declined.

But if the March financial data released next week is weak, at least it may still implement the RRR cut within the month.