After three months, 14-day counter-repurchase returned to the open market frequently, aiming at maintaining stable liquidity at the end of the quarter by influencing factors such as the peak of the tax-break period, the issue and payment of government bonds, and the expiration of local treasury cash management.
Last week, 230 billion yuan of reverse repurchase and 265 billion yuan of medium-term loan facility (MLF) operations expired in the open market. Meanwhile, the Peoples Bank of China carried out 320 billion yuan of reverse repurchase operations and 200 billion yuan of MLF operations. In addition, the landing site on September 16 released 800 billion yuan of funds. Last week, liquidity was abundant, but as market interest rates rose towards the end of the quarter, DR001 closed at 2.77% at 40 basis points last week and DR007 at 2.80% last week, up 16 basis points from the previous week.
From the perspective of liquidity stratification, Guo Yuwei, an analyst at Societe Generale Research, said that the overall liquidity stratification phenomenon increased slightly last week compared with the previous week. The average spread between R007 and DR007 was 15.83 basis points, up 3.62 basis points from last week.
Since September 19, the Peoples Bank of China (PBC) has invested 14 days of counter-repurchase for three consecutive trading days, totaling 210 billion yuan, in order to alleviate cross-season capital shortage. The Peoples Bank of China continued to protect the tray and the shortage of funds eased. As of 11:45 on September 23, DR001 fell 1 basis point to 2.78%, DR007 fell 6.28 basis points to 2.74%.
Dongwu Securities (9.700,?-0.19,?-1.92%) reported that the Peoples Bank of China restarted 14-day reverse repurchase, which is expected to maintain the stability of cross-quarter capital market, similar to the 28-day and 14-day reverse repurchase launched in mid-June.
A total of 210 billion yuan of 7-day reverse repurchase expires this week. Xie Yunliang, chief Macro Analyst of Minsheng Securities, said that in the cross-season context, most of the maturity counter-repurchases are expected to be hedged. From September 24, less than 7 days before the National Day, the significance of introducing 7-day counter-repurchase has been reduced, and the cross-season factors have resulted in tight capital face. It is expected that the Peoples Bank of China will take 14 or 28 days counter-repurchase as the main factor, which is conducive to lengthening the end-of-debt period of banks, and the capital face is expected to stabilize.
On September 20, the second quotation of the reformed loan market quotation rate (LPR) came out. The one-year LPR was 4.20%, which was 5 basis points lower than the previous quotation. The five-year LPR was 4.85%, which was the same as the previous quotation. The moderate downward trend of LPR is in line with expectations and is consistent with the tone of the previous national regular session.
Analysts said that the one-year LPR reduction was closely related to the 800 billion yuan long-term funds released on September 16. Since LPR consists of policy interest rate (MLF interest rate) and bank plus point, the plus point mainly depends on the cost constraints of the quoting bank itself, the relationship between supply and demand of market funds and the judgment of risk premium. A full reduction of 0.5 percentage points will help banks reduce their capital costs in part, thus affecting their interest rates on the plus part. At the medium and long-term level, the LPR over the five-year period has not changed. It is also consistent with the direction of keeping the interest rate of personal housing loans basically stable mentioned by the Peoples Bank of China in the earlier period, and does not exceed market expectations. As far as monetary policy is concerned, the focus of regulation and control in the future will still be to reduce the cost of banksliabilities and alleviate the financing pressure of the real economy in order to achieve structural adjustment and cost reduction.
Source: Responsible Editor of Financial Times: Chen Hequn_NB12679